Performance Reviews

The How and Why of Performance Review Calibration

May 1, 2024
May 1, 2024
Lyssa Test and Julia Nagle
Lattice Team

Imagine this: As your HR department looks more closely at ratings from your most recent review cycle, you discover that employee scores varied greatly based on who gave them. Performance is subjective, after all — how two different managers define poor, good, and great performance could vary widely. That discrepancy can impact everything from employee morale to compensation decisions.

So how can you ensure that performance raters are all on the same page with their scoring criteria and scale? It’s simpler than you might think: You can accomplish this with performance review calibration discussions.

Below, we’ll take a closer look at what performance review calibration is, why these conversations matter, and how your company can implement its own calibration process. Read on to learn how to hold your employees to the same standards and shape a more fair, consistent, and equitable review process

What is performance review calibration?‍

Performance review calibration is the process of reviewing and standardizing employee performance ratings across related teams or functional areas. Calibration aims to ensure employees in similar roles are rated by the same metrics.

Calibration conversations typically occur after collecting reviews so raters can align and update their scores based on the established rating standard. These conversations also train managers to apply a uniform company standard when reviewing their direct reports’ performance in the future.

Why is performance review calibration important?

The performance review process should give all employees an equal opportunity to succeed and receive valuable feedback on their work. Unfortunately, having an employee's performance rating determined solely by their manager — as is the case in many businesses ’ performance management processes — can involuntarily invite bias into reviews and disproportionately help some individuals while disadvantaging others.

Let’s say you have two managers on the same team, Manager A and Manager B. Each manager has one direct report who both work identical jobs and have the same work ethic, productivity, and overall performance. Surprisingly, these employees do not receive identical performance appraisal ratings. Instead, their scores vary dramatically because each reviewer interpreted the scoring system differently.

Manager A’s Rating: ⭐⭐⭐⭐⭐Manager B’s Rating: ⭐⭐⭐
For Manager A, a rating of 5 out of 5 meant that the reviewee was meeting the outlined expectations for their role and delivering great results.For Manager B, a 3 out of 5 rating meant the employee was doing well in their role but they have the potential to improve. So Manager B gave their team member a lower score to help motivate them to further improve.

While Manager B gave a lower score not as an act of harshness but out of the well-intentioned sense that every individual has room to grow, this can adversely affect their employee, especially if promotions and raises are tied to these scores.

Employees talk, and clear rating discrepancies like these harm employee morale and make employees doubt the fairness of the performance review process. This is where review calibration can help.

Benefits of Review Calibration

Performance review calibration can mitigate the effects of bias and establish consistency across departments, improving fairness overall.

  • Mitigates bias. Training your managers to identify and understand their own biases and how they might crop up in the appraisal process is important, but you also need managers to be on the same page when it comes to how they determine an employee’s level of performance. A clear evaluation process and rating criteria can help reviewers make decisions based on teamwide standards, not gut instincts. This can help diminish the potential impact of unconscious biases like affinity bias — the tendency to favor those who are like us.
  • Creates consistency. When the scores from Managers A and B undergo review calibration, their identically performing employees will receive identical scores. This consistency in how employees are evaluated in similar roles — regardless of their manager, team, or department — improves fairness. Plus, with similar standards across business units, senior leaders can have more faith in the accuracy of performance data across the company.

How to Conduct Performance Review Calibration Conversations

Once you’ve identified the need for your managers to align on a rating scale, it’s time to organize calibration conversations. Your company’s HR team is responsible for scheduling and facilitating these discussions and ensuring managers leave knowing how to score their direct reports.

Successful performance calibration meetings typically revolve around three things: Picking a scale, explaining what each number means, and figuring out the potential distribution of scores.

1. Select a scale.

First, you’ll need to establish what type of scale your managers will use to rate their employees. One of the most common scales, and our recommendation, is a five-point scale that evaluates employee performance from 1 (poor) to 5 (great). A three- or four-point scale loses some of the nuance that comes with a larger scale, but feel free to pick a scale that works best for your business.

2. Define rating meaning.

Next, you’ll want to determine descriptive ratings for each numeric value to help your managers accurately interpret each rating’s meaning. Just make sure that whatever language you pick is clear, so every manager knows what their direct reports must accomplish to be awarded a “1,” “5,” or any number in between.

For example, you can assign the following descriptions to each numeric value:

Did not meet expectations
Sometimes met expectations
Consistently met expectations
Consistently exceeded expectations
Far exceeded expectations

Using a standardized rating system across the organization will ensure that everyone in the company has the same definitions of performance and that managers know exactly how to explain these ratings to their direct reports. 

3. Determine the expected performance distribution.

Lastly, ask managers and leadership to determine what they expect the distribution of scores will be, or how many high and low performers they expect to see. When scores are distributed equally, your business should consist mostly of mid-level performers with a few low and high performers as outliers.

If you have a lot more poor or top performers than expected, you might need to revisit your recalibration strategy and ensure your managers are fully aligned on how to use your rating scale.

How to Calibrate Performance Reviews

There are two main ways to calibrate scores after the fact, and they depend on the size of your company. People teams at smaller organizations can conduct one-on-one conversations with each manager to understand how they interpreted the rating scale, and determine if some are rating their teams more harshly or leniently than others. As this strategy won’t be scalable for larger businesses, an alternative is grouping managers into calibration committees to review and adjust employee ratings together.

Here’s a closer look at these two approaches and how to use them to calibrate reviews.

1. One-on-One Conversations With Managers

If it’s practical, people teams at smaller companies should meet with every manager to understand the reasons behind their ratings. After hearing a wide range of reasons across departments, human resources professionals should be able to understand whether managers are too lenient, too strict, or “just right” in the scoring of their direct reports.

Armed with this information and a general understanding of overall business performance, your people team will have a strong sense of the overall rating distribution of the company and can update employee scores as needed.

One-on-one conversations are labor-intensive for HR professionals, so consider whether this is too large of an undertaking for your company before you begin. To know whether this strategy will work for your organization, ask yourself: How many meetings can the people team likely handle? If scheduling and conducting these meetings on top of adjusting scores seems like too big of a task for your HR department, calibration committees might be a better option for your business. 

2. Calibration Committees

Large organizations that need to have calibration conversations at scale should consider using calibration committees. These committees are made up of managers or skip-level managers that your HR team groups together based on whatever criteria you choose. For example, the managers on a given committee could be in the same department, on the same team, or just leading similar-sized teams. An HR representative should lead each committee's discussion and serve as a facilitator.

Here’s the typical flow of a calibration session for a committee:

  • Each manager shares how they interpreted the scoring criteria and why they awarded each employee the ratings they did. The group will need visibility into every employee rating during the calibration session, whether that be via a spreadsheet or a people management platform.
  • The facilitator prompts further discussion and pushes managers to come to a mutual understanding of what level of performance and mastery of core competencies warrant each rating tier. 
  • The committee updates scores as needed. Using a performance management system like Lattice, your people team can make employee score changes directly within the platform — so there’s no need for wrangling spreadsheets or dealing with data entry.
  • After the calibration conversation, managers finalize and share review ratings with their direct reports. And, with the knowledge from this session, participating managers can be more careful, consistent, and thoughtful about their employee ratings in the next review cycle.

Performance Review Calibration Best Practices

While the performance calibration process will look different in every organization, there are a few best practices to follow.

1. Clearly communicate performance rating criteria.

If you go to the effort of calibrating performance ratings, everyone needs to be on the same page. The only way to ensure that is with clear, well-communicated performance rating criteria.

The most successful HR teams employ various communication strategies, in addition to conventional tools like email or Slack. Consider leveraging time at a company all-hands meeting to reiterate how performance reviews work at your company, including a deep dive into your rating scale. Hosting optional office hours — or training sessions, especially for managers — gives HR teams another opportunity to explain performance ratings and field any lingering questions. Leave attendees with a takeaway, including a key explaining what each performance rating means, so they can reference it while writing and calibrating reviews.

2. Work to avoid bias.

Training your managers to identify and prevent biases is crucial for performance reviews and the calibration process alike. According to an experiment documented in a 2021 HBR article, teaching performance reviewers to identify biases helped reduce the effects of such biases in the reviews themselves. For example, negative personality comments about people of color went from appearing in 14% of reviews to 0% in the year after the bias identification training.

When team members recognize biases, they can work to rectify ratings stemming from them. The Center for WorkLife Law produced a helpful guide for identifying biases that commonly appear in performance evaluations as well as seven tactics for interrupting them. During your next calibration conversation, be on the lookout for any biases that may be affecting scores.

3. Split performance and compensation conversation cycles.

For many companies, performance reviews and compensation decisions are tied together, but the process can leave something to be desired. In Lattice’s 2023 State of People Strategy Report, 83% of surveyed HR leaders said compensation and performance should be linked, but 72% acknowledged their company’s approach needed improvement.

Part of this improvement can be splitting performance and compensation conversations into separate cycles. If you conduct performance and compensation reviews as part of the same motion, managers may feel pressured to rate their employees more highly because lower scores would mean no raises for their team. For employees, having compensation and performance discussed in the same cycle might lead to tuning out everything other than the pay. 

You’ll also want to leverage only final, calibrated performance ratings as part of compensation decisions. Separating performance and compensation discussions gives managers and HR teams enough time to calibrate employee ratings ahead of the compensation cycle. Conducting reviews, calibrating ratings, and making final decisions about merit increases and promotions is a lot for HR teams to handle in one quarter.

At Lattice, we run performance review cycles in Q1 and Q3, while merit increases occur in Q2. While the cycles are separate, merit increases still account for past performance. This means that each process gets its due time, raters face less pressure, and meaningful feedback conversations can happen without the looming shadow of compensation.

Using Lattice to Visualize Performance Calibration

When handled manually, performance review calibration can get complicated. After all, you’re seeking to apply objectivity to something inherently subjective: performance ratings. That makes it a cumbersome and high-stakes process. As your organization scales, managing the process via spreadsheets isn’t secure or tenable.

Performance review software should enable more than just the manager-employee conversation. Lattice empowers you to visualize the performance ratings and the calibration process, making it easier for HR teams — and the managers on your panels — to facilitate thoughtful discussions.

With the process represented in a customizable “box view,” calibrators can visualize employee scores in an intuitive and interactive grid. As your calibration conversations progress, participants can identify scoring discrepancies, reach a consensus, and reassign employees to the appropriate boxes. Lattice makes that crucial, final step as easy as a drag-and-drop — empowering teams to visualize changes in real-time, even during calibration sessions. Just hover over the employee to compare their pre- and post-calibration scores, reference current and past review cycles, or read notes for additional context.

Plus, at the end of the process, you won’t have to worry about employees seeing their pre-calibration ratings. With Lattice, reviewees will only have visibility into the calibrated score, while your HR team can view how employees were rated pre- and post-calibration.

Improving Reviews and Calibration With Lattice

Review calibration is an essential step in any performance review process. It makes managers’ jobs easier, ensures that employees’ performance evaluations are more fair and honest, and helps your people team guarantee that all review scores are based on the same performance standards. 

Simplify your calibration conversations by utilizing Lattice’s people management platform to create manager groups, update employee ratings in real-time, and analyze your data before and after adjustments to get the full picture of employee performance. Schedule a demo to find out how Lattice can streamline your calibration process and help you create fairer employee reviews.