Employee Groups and Performance Trends Over Time: Exploring the Value of Performance Ratings for Identifying High Performers and Other Employee Groups

The value of performance ratings has recently been widely discussed. We take a big data approach to performance ratings and propose a new use for performance ratings, an approach that could be used with other types of employee performance information as well. We investigate whether employees can be grouped according to their performance ratings over time. We draw upon several lines of research to make the case for the utility of examining whether it is possible to identify groups of employees based on performance rating trends. An analysis of the performance ratings of 531 employees over 4 years led to the identification of three employee groups as follows: “Potential Stars,” “Sinking Ships,” and “Consistent Employees.” Trends in turnover and promotions differed among groups. Our results suggest that organizations may wish to conduct similar analyses with their routinely collected performance data to identify employee performance groups and thus more strategically allocate developmental resources.