“The most wonderful time of the year? Performance review time. Obviously,” said no employee ever.
Most employees, and their managers, dread the annual performance review for many reasons. The process is laborious. The discussions can be awkward, especially if the manager needs to give negative feedback.
The employee review process would be worth the effort and temporary discomfort if it delivered results, but employee reviews don’t seem to motivate employees to improve performance.
According to Gallup, only “14% of employees strongly agree the performance reviews they receive inspire them to improve, and only two in 10 employees strongly agree that their performance is managed in a way that motivates them to do outstanding work.” Plus, many employees believe the rating system is unfair (71%) and inaccurate (74%).
How can you turn this process around? Learn how you can calibrate your performance reviews to ensure that performance appraisal ratings are fair, meet a consistent set of standards, and motivate employees.
What is performance calibration?
When you were in school, did you notice that there were a few teachers who graded students more generously than others? Rating systems are inherently subjective. What some people consider to be outstanding work is just average work to another. In a professional environment, performance calibration meetings are meant to keep the rating system fair and balanced.
The goal of the calibration process is to:
- Ensure that all employees get a fair and objective performance appraisal.
- Have the calibration committee agree on a set of standards to be applied to all employees during reviews.
Who should be involved?
In a calibration session, supervisors and managers responsible for conducting employee appraisals meet to talk about employee performance and ratings. In addition, the executive in charge of that business unit and an HR representative attend the meeting.
They all work together to review current employee ratings, define what the ratings mean, and justify the rating given to each employee.
What are the benefits of performance calibration?
Companies conduct annual performance reviews for a number of reasons. Leadership can give critical feedback—both positive and constructive—to employees so that they can grow in their careers and improve performance.
In addition, performance reviews can give organizations valuable data that helps them when considering promotions, allocating resources, and planning for leadership succession. This process can help leaders identify who the top, average, and low performers are. Top performers are typically rewarded more handsomely (bonuses, stock options, large raises, promotions, etc.) than average and poor performers in an effort to retain the best employees.
The performance calibration process includes these additional benefits.
Ensures accuracy and consistency of performance ratings
It is important that your calibration sessions clearly define what each performance rating means, so they are given to employees accurately. When performance ratings are distributed consistently and accurately, it can increase productivity, encourage employee retention, build team unity, and form strong working relationships between management and direct reports.
Clarifies what employees should do to receive high performance ratings
The calibration meeting should include a discussion about the criteria of each rating. Managers should be able to agree and reach a consensus of the expectations associated with the performance ratings.
With this information, managers can discuss with their employees exactly what is expected to receive a specific rating. It will also help employees understand why they are given certain ratings and will open the dialog for ongoing performance improvement.
Changes employees’ perception of the review process
Because performance reviews and ratings are tied to employee compensation and professional development, you will know if your employees disagree with the review process or find it unfair.
When employees understand the rating system and understand the criteria for receiving high ratings, they are much more likely to believe that they have been treated fairly even if the rating is lower than they wanted.
What is the calibration process?
To avoid the anxiety and awkwardness that can accompany a yearly review, use the following suggested steps to make it a positive experience for everybody involved.
Step 1: Start with a performance plan
Performance reviews become less difficult when there is a plan in place that makes it clear to the employee what the corporate, division, and department objectives are at the beginning of the year. Executives and HR should meet with managers and supervisors to explain the objectives, the rating system, and the criteria for high performance ratings.
This information makes it easier and more productive when managers and employees map out a plan for the coming year with clear goals and a clear knowledge of what level of work is expected for receiving high performance ratings.
The performance plan should include regular one-on-one meetings to review individual progress, restate expectations, offer support, and to make adjustments as necessary. This approach can alleviate a lot of anxiety about yearly reviews and can help employees feel like they are being treated fairly.
Step 2: Complete training and self-evaluations
As employees gather information and write their self-review appraisals, managers should attend training to review performance standards and to review what their role is in the process. Managers then collect and read the employee self-reviews and assign performance appraisal ratings.
Step 3: Hold performance calibration meetings
The employee appraisals are submitted to senior management and HR for review. A performance review calibration meeting is set up with managers, senior leadership, and an HR representative 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. Participants engage in discussions to adjust individual ratings as necessary to align with standards and to ensure that ratings are given accurately and consistently.
To help you ensure consistent evaluation, consider overlaying employee data on org charts. Org charts give managers an easy-to-read overview of the employees being reviewed and can help them determine if there are disparities in pay, identify trends (employees showing steady improvement or no improvement), and help to determine which ratings apply to each employee.
Best practices for performance calibration meetings
Check out these additional tips to make sure the performance calibration meeting runs smoothly:
- Make sure that managers have completed a preliminary performance appraisal and assigned a rating before the meeting. HR should set clear deadlines to ensure this happens.
- Try to limit the number of people in calibration meetings so leadership can reach consensus faster and the meeting doesn’t run too long.
- Make sure to include leadership from each department or group so they can represent the exact type of work or metrics that are expected for roles that fall under their department. For example, the VP of Engineering would not have the background necessary to appraise the work of the sales team.
- Break up departments into smaller groups if needed.
Step 4: Deliver ratings and feedback to employees
When the employee performance calibration sessions have been completed, managers write their final appraisals for each employee and then schedule a one-on-one meeting to discuss the review.
The manager should be confident in how the performance standards were applied and have a good understanding of how each member of their team performs compared to other team members. This way, they can have a frank discussion about how and why particular ratings were given. If employees are disappointed with the rating, the managers can confidently support the decisions that were made and start planning for the employee’s performance improvement for the coming year.
Yearly performance reviews provide important information that can help managers and executives decide how employees will be compensated, who should be promoted, who should be invited to find another job, and who might be groomed for succession. And as part of that process, performance calibration meetings help companies develop criteria for specific performance ratings and apply those ratings consistently and fairly.
With Lucidchart, you can view your org and overlay employee data to fairly conduct performance reviews.