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I have always been convinced by face validity and experience that you can get inter-rater reliability on a three point performance scale. Five point scales, not so much.

Interesting post. I have two comments. The first is that the rating scale labels seem counter-intuitive to making employees feel good about their contributions. I'm not debating the number of ratings here, only what they are called. When we use wrords that are widely used in specialized applications, we have to be very careful about the conotations from normal use that they bring as baggage. Many people in North America interperet the word "Good" as meaning "o.k." (or maybe "good enough"). That's why we often hear people saying something was "'really' good". In other words, they mean it literally. When achieving stretch goals is labelelled merely "good", it may be demotiviating because it doesn't sound like something to be celebrated.

My other comment is that the real beauty of the UPS story is not the exceptional service you received (and it was impressive). It is that this was almost certainly produced in large part by how performance is measured at UPS. I have some knowledge of this since having spent over a decade in that fine organization.
Drivers and supervisors are measured on reducing the number of second and third delivery attempts and returned packages because all of these represent a significant cost to the system. (It is more expensive to send the shipment back to the shipper than to redirect it to your new local address). It is also good (or great) service, but a undelying it is a performance measurement system firmly in place with clear links to bottom line business results and and this system is robust and meaningful.

It's a great (perhaps exemplary) system.

How can a company compensate and remunerate its employee secretly that other employees don’t get to know? Please advise.

Hi Girish,

In the US it is very difficult to keep pay secret. In most cases companies cannot prohibit employees from discussing their pay with each other.

The best solution I have seen is to spend enough time communicating with each individual that they trust they are being compensated properly and have little need or desire to share.


Thanks for the comment. I agree that a three point scale is the best approach. Anyone off the scale at the top or the bottom should be handled as a one-off.


Great point about the language. Thanks for covering it so well.

The additional details on the UPS system explain a lot. After this article was published the Manager at the San Francisco location sent me an email to learn more and assured me that everyone involved would be recognized. He also told me that the article would be posted on their internal website as a real world example of things going the way they should.

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