Most employees give poor marks for their employer’s performance review process. This lack of confidence in the process leads to employees having a perception that the performance review process is unfair. The perception of inequity has a profound and unfortunate impact on an employee’s motivation and engagement. In reflecting on your current and past employers, how would you rate their performance rating processes? Would you give them an A+, a B-, or perhaps an F. Employees rarely give management high marks for the processes by which they are rated.
Before discussing a strategy to address the issue of unfair reviews, let’s peel back the outer layers of the onion and get to the core. Most managers do not give considered objective ratings. Some managers are tough graders who seldom give a positive review.
"With a healthy calibration process and data to support decision-making, the top performers can be compensated at a higher level and the low performers can be managed up or out"
Other managers seek appeasement by easily handing out high marks to everyone, Santa Claus on one end, Scrooge on the other. Yet there are some managers who take all meaning out of the process by handing out average marks across the board. Rarely do we see a lot of thought and differentiation based on performance.
Without a properly structured process in place, most managers would handle their reviews in a vacuum without input from others. At best, they are asking matrix or co-managers for feedback and incorporating it into the review. This is not good enough for this generation of employees. Millennials seek feedback from managers, peers, and clients, and a more well-rounded approach.
Performance calibration can be utilized to facilitate meaningful reviews that are consistent across an organization. It is a process for a group of managers to compare and contrast performance of their individual team members. While there are different methods of conducting performance calibration, they all involve active collaboration by managers. In a calibration meeting, managers come together to build a consensus on how they look at the company’s rating scale. For example, on a five-point scale, managers might agree to reserve the highest rating for employees who had a spectacular year or are promotion-ready in their current role. Managers also discuss strengths, development needs, career paths, and achievements of each team member and assign a rating for each employee. Respectful debate and challenging each other are encouraged for performance-based outcomes. These outcomes help us make sure the right people are in the right places on the path that will lead to growth and reduced turn-over.
Ground rules are recommended. Confidentiality of the dialogue and mutual respect of contributions are the two most important rules of the meeting. The process can become time consuming and therefore it is important to remain focused on the agenda. Calibration should occur a few weeks in advance of managers’ writing and delivering performance reviews. A facilitator can take notes which remain available to the managers for reference during the review process. Employees benefit from ratings more consistent and fair due to the healthy discussions that took place in the calibration meeting. Calibration allows managers to vet their thoughts with other managers, compare and discuss what each rating means, and structure time to think through each employee’s performance.
Calibration is a great tool to help build a performance management culture. If performance is calibrated, it helps the company differentiate between high potential top talent, valued and steady talent, and less effective talent. In turn, this information is critical to the company in making strategic plans for short and long terms adjustments to the organization structure. Further, individual managers are enabled to motivate performance that leads to growth, teamwork and client excellence.
All of the data that is captured can be entered into performance management software. There are many options out there to capture that kind of data. With the data captured from calibrations and reviews, companies can make decisions on how to compensate top talent and valued talent, and manage low performance up or out. The data culled from Performance Management Systems can make these processes more scalable. They can also help organizations make better decisions based on data. For example, most of these software tools include a dashboard that shows a scale of the ratings. We know that if we are calibrating and differentiating performance, the curve is likely to fall in a bell shape. Technology gives us a fast visual of our process which leads to improved analysis and discussion.
While meeting to calibrate performance, some companies use the approach from the book Who Is On Your Bus by Ron Clark. With this strategy, employees can be looked at in other categories such as the categories such as drivers who steer the organization and set the vision and strategy, runners who are constantly engaged and working toward quality results and growth, joggers who are those steady players that achieve good results, walkers who need the right push and coaching, or performance may fail. Finally there are the sitters who slow down progress and go-forward strategy on performance improvement exit are appropriate. As Ron Clark states in his book, we want to fuel the runners. By identifying the runners, we can put tools and resources in their reach to help us achieve better results, and we can encourage the joggers to run if we have identified who they are.
With a healthy calibration process and data to support decision-making, the top performers can be compensated at a higher level and the low performers can be managed up or out. Ultimately improving the decision-making and thought that goes into performance management, employees will be more engaged and motivated to perform and grow the company and themselves as productive employees.