Online rating systems are central to how firms monitor performance and make decisions. Yet as ratings increasingly cluster at the top end, their ability to distinguish actual differences in quality declines – a phenomenon known as information compression. This paper examines when such compression distorts managerial insight and when it simplifies decision-making. We identify three categories of boundary conditions – evaluation system design, evaluator dynamics, and contextual factors – that determine whether compressed ratings hinder or help managerial interpretation. The proposed COMP-ACT (Compression–Action) framework links these diagnostic conditions to four actionable strategies: act diagnostically, triangulate, steward trust, or embrace compression. These strategies guide how managers interpret and manage online evaluations, depending on decision importance and the level of evaluator interaction. The framework further helps managers restore insight where ratings mislead and leverage convergence where it signals stability, offering practical tools for navigating compressed evaluative data in increasingly data-saturated markets.