Ratings as Incentives

Let’s assume, just for the moment & until we replace it, that your company has a performance review process. Periodically, maybe once or twice a year, every employee get some sort of rating—1-5, doesn’t meet/meets/exceeds expectations, something like that. (I’ll write in the future about the perverse incentives created by such a process, but let’s assume the process as a given.) What is an effective way to regard these ratings?

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