Performance reviews can help develop and motivate employees when done correctly. However, unfair or inconsistent ratings can tarnish the value of performance reviews and put certain employees at a disadvantage.
Inconsistent ratings can often happens due to the variance between managers. For example, some managers will give all their direct reports a 5/5 because they met all expectations during that review cycle. On the other hand, a ‘strict’ manager may reward those employees 3/5, whil only awarding 5/5 to their top performers (i.e., the employees that go above and beyond expectations). Since managers have influence on compensation and training & talent decisions, employees that are unlikely to get the ‘strict’ boss may have their career development delayed or worse, halted. Moreover, employees that notice the review cycle being unfair, can begin to feel unmotivated and frustrated quickly.
What is performance review calibration?
Calibration is the process that aims to make review objective and consistent throughout the organization. This practice is meant to limit bias in the performance review process. We want to highlight that most of the bias is unconscious. The source of these biases can often be due to differences in how managers understand and view the rating system. In other words, they are not all on the same page about how to review employee performance.
The benefits of review calibration
1) Increase the accuracy of reviews
Calibration helps keep the review process fair by clarifying what good, bad, and top performance looks like. By reducing/eliminating variance between managers, employees can be fairly assessed for their performance (which will also influence compensation and promotion decisions). This is important for top performers, who can leave if they feel their work is not being valued or acknowledged.
2) Helps eliminate workplace biases
Because the main purpose of performance review calibration is ensuring consistent and fair performance reviews, it helps eliminate common biases that occur. It also allows ensures that there is transparency within and between teams.
3) Make better-educated decisions about your talent
Organizations want to identify and keep top talent. Top talent can be 400% more productive! Organizations need to be able to accurately identify who their top performers are in order to make the correct talent decisions (i.e., promotion) and in order to retain them for the long haul.
Pro tip: We strongly suggest using a performance management solution that allows you to document feedback.
The “how” of review calibrations
1) Have 1-on-1 conversations with managers
After performance reviews, people teams should meet with all managers to understand the managers’ scoring style. This allows people teams to understand whether a manager leans too far into lenient or strict scoring of their direct reports. These conversations can be important when self assessments, 360 assessments differ greatly from the manager’s scoring.
2) Set up calibration committees
A performance review calibration meeting should be set up with managers, senior leadership, and an HR team member (who acts as a facilitator). This group reviews the employee appraisals and performance ratings to ensure that everybody was measured using the same standards. At this point, it may become apparent that some managers assess employees as high performers while others assess employees who perform to the same standards as average. Scores should be adjusted accordingly. The HR representative may also want to clarify expectations/score ratings and suggest further training to managers whose scores were outliers.
Ensuring fair performance reviews (beyond calibration)
Organizations need to focus on a few main things to keep performance reviews consistent across managers and departments. This goes above and beyond review calibration.
1) Provide sufficient training to managers
Organizations should provide training to their managers that includes clear expectations for employees and unconscious bias training. Organizations should also cover performance standards and the rating scales (if applicable). Each manager needs to understand what the rating represents. This will help provide consistency throughout the organization and allow managers to hold fair performance reviews for each employee.
2) Implement 360-degree reviews and self-assessments
360-degree reviews and self-assessments allows for a more accurate picture of employee performance. Peer feedback can be extremely helpful when conducting fair performance reviews since many managers are not privy to the day-to-day activities that employees go through. Self-assessments can also be very helpful in understanding the employees’ point of view on where they believe they are excelling and what they also need to improve on.
3) Encourage continuous, real-time feedback
While 360-degree performance reviews are encouraged, we also suggest implementing 360-degree, continuous feedback within the organization. Continuous feedback can help develop your employees faster, keep them engaged, and give them feedback in real-time to correct any behaviors to save the employee and the organizations time and resources. Moreover, continuous feedback helps mitigate recency bias, thus making the appraisal process more objective.
4) Stay clear and current with expectations
Evaluating an employee on previous or outdated expectations is unfair and can cause confusion throughout the organization. We suggest managers be trained as mentioned in point# 1 about setting clear expectations to their employees. We also recommend that managers have regular check-ins with their direct reports to help clarify expectations and ensure that employees are getting the support they need.
5) Come prepared with sufficient quality feedback
Ratings are useless without sufficient quality feedback. Managers need to come to performance reviews with specific examples of the employee performance to support their ratings/feedback. Effective feedback is constructive, objective, relevant, and kind; it ultimately helps the employee improve.
Performance reviews are incredibly important to continuously develop employees. If done poorly, organizations may find themselves losing their employees. If done correctly, the reviews can truly motivate and develop employees.
How do you perform your performance review calibrations?