Performance reviews have been around for a long time. Yet they are only said to be effective if both parties are comfortable with the assessment that is presented. On the face of it, it may appear that employee performance reviews take up a lot of the manager’s time and efforts. However, the resulting payoff of carrying out performance reviews effectively, is huge.
Performance management can become a boon or a bane for any organization depending on the way they are conducted. They are a boon as they provide an opportunity for these organizations to interact with their employees and discuss the latter’s performance, their goals, and organizational priorities over a specific period of time. They can quickly become a bane if they are not handled correctly. Primary reasons behind which are inconsistent and biased evaluations. The latter situation has led to many employees feeling dissatisfied and demotivated in the workplace.
Employee performance management can be especially tricky for companies who do not have an objective or standard measure of performance. Different managers may use different methods of performance appraisals. Here, employee evaluations are more subjective in nature and hence more prone to inconsistency and bias. There are various incidents wherein undeserving candidates were rewarded whereas deserving candidates did not get due recognition. A major reason why employees dread performance reviews.
For example, a department may have two or more managers (A & B) to handle large teams. Each manager here has a certain number of employees reporting to them. Manager A could be more lenient and rate performance generously whereas Manager B could be more passive and be strict while grading his team. Here, despite performing the same set of activities to achieve a common goal,
Thus, it is imperative that companies create an overall standard procedure to conduct these reviews. Without standard guidelines, more reviews are bound to be subjective and, in some cases, downright biased. What measures should be taken to avoid such situations? Performance reviews need to be revamped from time to time as newer generations continue to enter the workforce in larger numbers. What has worked in the past may not always continue to do so.
According to this HBR article, managers alone should not handle performance reviews of employees. One approach that they observed in some companies is to use performance calibration committees.
What is a calibration committee?
Performance calibration committees generally consist of higher level or senior managers. Their responsibility is to adjust the ratings or grades given by managers in order to improve consistency across the organization. It is based on past performance and used to make sure evaluations are objective for every employee with similar roles and responsibilities.
What is performance review calibration?
Performance review calibration refers to the act of evaluating the performance reviews, by the seniors of the manager. In this process, past performance data is taken into account to find common ground between similar roles in different teams. By making consistent employee performance evaluations possible across teams, the practice of performance calibration limits bias and arrives at a criterion that can be used for rating team members in similar roles across the organization.
What happens at a calibration meeting?
Calibration meetings are established to discuss the most important criteria to identify top performers in the organization, by normalising the performance review process across departments and teams. These meetings involve reviewing the proposed ratings of employees, agreeing on a performance rating for every employee, and making adjustments as required.
Process of performance calibration:
As is the norm, managers review employee performance according to the scheduled timeline. These ratings or grades are then studied by the calibration committee in a detailed manner. They try to identify the common factors behind certain achievements or failures/shortcomings and the ratings associated with those factors. Once these are determined, the committee then decides whether or not to adjust performance of employees. These modified ratings are then discussed with managers in a meeting so that they are aware of the changes that were made.
The committee also explains the reasoning behind the modification of employee ratings. The goal here is to make managers understand that they need to apply similar standards across all employees and evaluation should be based on the same criteria.
It has been observed that managers are the ones who monitor employee performance. They have the final word in evaluating their team’s performance. However, they are too close to the ground level so they do not have the vision that their senior managers possess. These senior managers or superiors have overall macro-level information about the team/department. They know what ratings have been given by different managers to their team. They i.e. the calibration committee uses this knowledge to assess ratings given across all teams and ensure that there is an improvement in consistency of performance ratings.
Consider the above example of Manager A and Manager B. The calibration committee will study the variation between the ratings of both teams and try to bring about more parity to ensure fair evaluations. In this case, the committee could study the performance measurement criteria and downgrade ratings of Team A and upgrade ratings of Team B. This could bring both teams on equal footing.
It has been observed that eventually both managers learned to rate employee performance in a more consistent manner. Eventually, there is minimum intervention needed to balance such ratings.
Tips for conducting performance calibration meetings:
- Ensure managers attending the meeting are at similar levels
- Limit the size of the group to avoid conducting meetings for long duration
- Club managers of the same team/department/function together to maintain consistency in ratings
- Encourage managers to share reasoning behind performance ratings
- A member of the HR team can act as a facilitator in these meetings to ensure they are conducted smoothly
Benefits of Performance Review Calibration
Performance review calibrations increase review accuracy by streamlining different rating methods followed by different managers, and reward high performers with more responsibility and growth (career and monetary).
Setting a bar for high performance ensures employees approach their work with more certainty. Providing the recognition and reward they deserve, when done right, can motivate employees to raise the bat voluntarily themselves too.
Calibration discussions reduce bias, as managers sometimes tend to rate their direct reports based on their personal idea of performance without them. Thus, the calibration process sets performance standards that can apply to all employees equally.
One of the necessities of the performance review calibrations is being transparent with employees. This can be achieved by sharing how ratings are determined, and this step goes a long way in building trust among employees. Unlike annual performance review processes, the calibration process allows managers to review and set performance standards for their direct reports, without any bias. Calibrations don’t just ensure that reviews are more fair and equitable – they make it so employees believe the process is fair and equitable.
Drawbacks of performance reviews calibrations:
- It is easy to modify ratings that were too high or too low But average ratings are not usually considered for modifications by the committee. So these performance ratings remain untouched. To ensure consistency, even those with average ratings need to be considered while calibrating ratings.
- Once ratings are adjusted and brought to a certain level, the whole idea of finding out star performers and poor performers is defeated. It gets extremely difficult to reward and recognize the star performers while those with poor performance cannot be identified and hence cannot be trained to develop their skills.
Calibration committees will certainly help bring consistency in performance ratings. But there are still certain aspects that need to be answered before this can become a standard practice across all organizations. What steps do you think should be taken to improve this process?
