Using a performance review system to reward employees

If you use a performance review system (or if you don’t… yet!) and use performance ratings, you’ll know that rewarding staff in line with employee ratings can be a contentious topic. Having a calibration process in place can help to ensure fairness and accuracy when ratings are awarded.

Calibrating Performance Review Systems

What is performance calibration?

Performance calibration is the process of ensuring staff performance ratings conducted using your performance review system are consistent and fair. This must apply across a business, and should NOT involve sitting in a dark room while senior managers tweak ratings in line with their subjective viewpoints!

How to run an effective calibration meeting

Invite managers to attend who are of a similar level within the business, or within a specific business division. They should come ready to represent either their own direct reports or the direct reports of managers reporting into them. To support the rationale for giving a particular rating, managers should be briefed to bring specific examples/behavioural evidence. This is where a good performance review system can help. It provides an audit trail which managers can use to support and provide evidence of good staff performance. In addition, it is important to have a neutral facilitator at the performance calibration meeting who will run the session.

The calibration meeting provides a forum for discussing the individual performance of staff. Furthermore, the goal is to make sure that managers have applied similar standards across the board. This process helps to ensure that all employees are evaluated on the same criteria – no matter to whom they report. This is helpful to employ when you use a performance review system because the review discussion does not have any third party input.

In addition, meetings help managers to learn how to observe performance and apply standards. Therefore, this is often a powerful learning experience for managers and will consequently help them improve on the content they input into the performance review system. Until the business is able to calibrate effectively, this is a key reason we don’t recommend attaching remuneration to the rating.

Performance related pay

How calibration of the results can run

There are a variety of ways in which calibration of the results gained during performance reviews can run. These include:

  • Viewing all the staff with a specific rating band in place. Then encouraging other managers to comment (constructively) on anyone who stands out as having a rating either higher or lower than expected.
  • Speaking with all the managers one by one and discussing the evidence with other managers. Then commenting on the evidence, or offering additional behavioural examples to support or challenge the rating.

It’s not about forced ranking

It is important to note that ideally, calibration should not include forced ranking or distribution. Rating distribution should be examined across groups and managers should discuss whether they fit with the overall business or team performance. Ratings should be adjusted through agreement only and managers should be prepared to feedback any changes in rating to the staff member.

Performance calibration meeting agenda

  • Discussion about confidentiality
  • Review of the rating scale/s employed and what each rating means
  • Initial review of performance distribution of the business unit, including how the distribution compares to the previous performance period and/or desired distribution
  • Discussion of how initial ratings align with the results produced by the business unit
  • Presentation and discussion of each employee’s rating/s and the manager’s explanation /rationale behind the rating
  • Adjustment of ratings, as necessary, to accurately reflect performance over the performance period

The use of an employee performance management system can greatly enhance the effectiveness and efficiency of performance calibration meetings. Technology provides HR and business unit leaders with immediate and direct access to individual and aggregate level performance evaluation data. All participants in performance calibration meetings can collaborate using technology to review performance ratings, supportive comments and historical data.

For more information, get in touch below for a demo of the Actus system and find out how performance reviews, as part of a performance management system, could benefit your organisation.

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