Performance reviews are notorious for creating angst amongst employees as they sit waiting for their manager to decide their fate. Some workers feel comfortable knowing that they have a good relationship with their leader who is fair or even lenient. Other employees anticipate the worst, knowing their manager can be ‘tough’ when allocating a rating. In many ways, there is a similarity to school days when students preferred some teachers over others based on their reputation.

Achieving objectivity, being conscious of bias, and allocating fair employee ratings remain a challenge for many organisations. There is a strong and direct link between performance appraisals and employee engagement; so there is plenty of motivation for employers to get this right.

Introducing performance calibration into an organisation’s performance strategy is one clear way for employers to demonstrate that they are serious about achieving performance outcomes that are fair, consistent, and without bias.

So, what is performance calibration?

Performance calibration provides a forum for managers to come together prior to finalising employee ratings to discuss the performance of their direct reports. The key goal is to ensure that managers understand and apply ratings using the same criteria. The process requires each manager to present their reasons for their indicative rating and it allows other leaders to provide input. A key benefit of calibration is that the employee’s rating is in the hands of the collective group which ensures a much fairer outcome.

Do we need to apply forced ranking or distribution?

Forced ranking or distribution is used in large organisations to balance the distribution of low, average and high performers. This approach is not recommended in organisations where the employee headcount is less than 150. It is, however, important that the reviewing managers understand that not all employees ‘meet expectations’ and certainly not all are ‘outstanding’. It is very common for employee ratings to be spread throughout the distribution range with the majority falling into the ‘met expectations’ category.

Who participates in a performance calibration meeting?

The calibration meeting is usually made up of:

  • a senior leader who will be the ‘Chairing manager’,
  • a representative from HR, and
  • a group of reviewing managers.

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Where an organisation has multiple departments (e.g. Production, Sales, Operations), it is common for multiple calibration meetings to occur to enable a ‘like for like’ discussion.

It is recommended that reviewing managers are at a similar level and that it makes sense for them to come together for calibration. Employers should try to keep participants to six-eight reviewing managers to avoid the meetings going beyond a two-hour period.

What should a reviewing manager do to prepare?

The reviewing manager has a clear responsibility to fairly represent their direct reports by preparing a succinct summary of key achievements, projects, and demonstrated behaviours that align with the organisation’s values. The reviewing manager will provide a rating that they feel is indicative of the performance of the employee. They also need to be prepared to answer questions or give more detailed evidence where required.

Are ratings challenged?

It is common in a calibration session for an employee’s rating to be challenged as the group of reviewing managers seek to drive consistency and ‘calibrate’ rating outcomes. One leader may feel that they have an employee who deserves an ‘Excellent’ rating, whilst the peer group may feel that the actual performance and behaviours are more accurately aligned to the ‘Met expectations’ rating.

This example demonstrates that sometimes a leader’s perception may not be consistent with how other reviewing managers would allocate a rating. It is the role of the chairing manager to facilitate a discussion that helps the group to land on a consensus. Robust discussion is fundamental to the success of calibration and should be embraced.

What can I expect from the calibration meeting?

Calibration meetings are structured and well-led to ensure that the desired outcome of agreed ratings for all employees can be achieved. Usually, the performance calibration will follow this agenda:

  • chairing manager framing up expectations and confidentiality,
  • a review of the rating scale and examples of what each rating means,
  • an optional summary of the distribution of ratings for the same group in the last performance period,
  • each reviewing manager sharing a summary of their indicative ratings and rationales,
  • discussion and agreement of ratings, and
  • confirmation of all agreed ratings prior to the meeting end.

Employee ratings are discussed in categories to enable consistency and comparison. It is common for calibration meetings to start by discussing employees with an indicative rating of (5) outstanding, followed by (4) Excellent, (2) Needs improvement, (1) Poor Performance, and ending with (3) Meets expectations. This approach covers the exceptions before discussing the majority. It also provides a benchmark of what success looks like.

The meeting structure provides all managers with a valuable chance to highlight the achievements, strengths, and gaps of their direct reports. It also enables an excellent opportunity for leaders to gain insights into the perspectives of other managers regarding the performance of their team.

Calibration drives accountability

Calibration is a valuable performance evaluation tool that works hard to drive accountability amongst the leaders in the business. In many ways, it ‘forces the leader to show their hand’ and back up their decisions with evidence and examples. The calibration process supports leaders by hearing feedback from peers and learning to clearly define the exceptional from the good performers and the good from the poor. It enables the business to collectively learn about talent and work together to identify poor performers. Employees gain confidence in the system and no longer fear drawing the short straw in the ‘manager lottery’.

Further information

Ai Group has experienced HR consultants who can partner with your business to devise a fit-for-purpose performance management system. For assistance with your workplace matters, Members of Ai Group can contact us or call our Workplace Advice Line on 1300 55 66 77 for further information.

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Georgina Pacor

Georgina is Senior Content Writer and HR Specialist – Publications at Ai Group. She is an accomplished Human Resource professional with over 25 years of generalist and leadership experience in a broad range of industries including financial services, tourism, travel, government and agriculture. She has successfully advised and partnered with senior leaders to implement people and performance initiatives that align to business strategy. Georgina is committed to utilising her experience to create resources that educate and engage and is passionate about supporting members to optimise an inclusive workforce culture that drives performance.