Performance bands, which also are known as performance categories or ratings, are a technique used by organizations to sort and classify employees' performance levels into a predetermined range or system. Generally, performance levels are presented in low-high ranges and accompanied by terms like “below expectations,” “meets expectations,” “exceeds expectations,” or “outstanding.” These levels standardize the assessment and communication as to the staff members' performance, used for decisions related to compensation, promotion, training, and development.

Example

For example, let's say a large corporation implements an employee performance management system for annual performance evaluation. In this case, employees are assessed and given ratings based on performance criteria aligned with the organizations goals and values. These ratings are then matched with performance levels such as "needs improvement", "fully competent", and "exceptional", to bring about clarity and consistency in performance appraisal. Managers utilize these performance tiers to provide feedback to employees, set performance goals, and to determine reward and recognition.