Ratings are calculated according to players' performances in official events. They reflect each player's skill level.
The system is used to form divisions in tournaments and facilitate pairings. The "logic" behind ratings - they predict a player's chance of victory against an opponent. If a player does better than s/he was "supposed" to have done, his/her rating goes up. If they do worse, it goes down.
The Israeli ratings system is no longer updated regularly. However, tournaments played in Israel are rated on two international system. The international WESPA ratings can be found here, and the ABSP (Association of British Scrabble Players) ratings can be found here.
If you have any queries contact Evan. If you wish to organise an event and have its games rated, make sure you contact Evan before the event.