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 reviews 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 reviews 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, the two teams will receive different scores due to their respective manager’s subjectivity.
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 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 calibration committees.
What is a calibration committee?
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.
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 are able to closely monitor employee performance. So it makes sense that 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
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?