Grades vs. Performance Ratings

Ever since you are a little kid, you are rated on some sort of grading scale.  You are an A+ reader, a “gold star” in math, and a “check-plus” in gym.  Teachers, and other evaluators, use different grading systems in order to compare you to other students or to what is considered the “norm”.  Corporate America has different grading scales and systems across companies, but they all have them.  Fortunately, by the time you join Corporate America, you are accustomed to being graded and compared to others.  Here are some of the key similarities and differences between grades as an undergrad and performance ratings in Corporate America (A note - these are based on my experiences in Corporate America.  Not all companies operate in the same manner with their performance ratings):  

Similarities:

  • In undergrad, the grading scale is either GPA based or letter-grade based.  In Corporate America, the grading scale is performance-based and, typically, is similar to the following: Does Not Meet Expectations, Meets Expectations, Exceeds Expectations.  For both, there is a fixed scale
  • In undergrad and Corporate America, the grading scale is performance based.  This may seem obvious, but it is important to note: The better you do, the better your grade or rating.  This results in more accolades in undergrad (Honor Roll) and Corporate America (i.e. promotions, bonuses, pay raises)

Differences:

  • The most important difference is that in undergrad you have, for the most part, full control over your ability to get an A (or 4.0).  Though in some situations you will be graded on a curve, it is largely your effort and ability that lead you to getting the grade you desire.  For example, if you do everything asked of you and get all the questions right on the test, you get 100%.  If you do everything asked of you in Corporate America, you do not necessarily get the highest rating, as getting an Exceeds Expectations, in many companies, is a major challenge that is largely out of your control.  Corporate America’s grading scale is based on a bell curve, so only a tiny percentage of the population gets an Exceeds Expectations.  Don’t get upset if you do not receive an Exceeds Expectations - this does not mean you are a bad performer.  Ask your manager what you can do for next year to be recognized as a performer who exceeds expectations
  • In undergrad, your professor is the only one to decide your grades.  In Corporate America, both you and your manager have the opportunity to decide your ratings.  Both parties fill out a standardized form that addresses performance.  That information is pooled together to make a final decision on performance ratings
  • In undergrad, once your grade is determined it is final and there is no chance for adjustment.  In Corporate America, since both you and your manager have inputs to determine your ratings, there is opportunity for adjustment.  Based on your inputs, you are able to impact your ratings.  Additionally, if you feel your rating is completely off-base, you have the ability to discuss it with your manager and, possibly, get the rating changed
  • Grades in undergrad are determined on a per-class basis.  In Corporate America, you get one rating: overall performance rating.  This means your performance needs to be solid across all areas for the entire year in order for you to get the rating you want

While being graded based on performance is nothing new, it is clear the differences outweigh the similarities between undergrad and Corporate America.  So long as you keep up your strong performance, you have little to worry about.  But, it is critical to understand these differences so you set appropriate expectations and know what you can do to improve your performance and performance ratings.  Use your manager as a resource to understand the ratings at your particular company.

Performance ratings are nothing to stress out about - it is simply a reflection of what you did the prior year.  Having regular conversations with your manager to get a pulse check on your performance will make sure you don’t have any surprises at the end of the year.

Otherwise - keep up the good work and you’ll be on your way to a positive performance review!