By Claudine Kapel
Do your employees put much stock in the results of their performance reviews? They won’t if they feel their performance and contributions have not been fairly evaluated.
A common challenge with performance appraisals lies in ensuring managers have a consistent interpretation of the performance rating scale, including what it means to meet or exceed performance expectations.
Consistency is essential for fair and meaningful performance appraisals. But achieving it is often easier said than done. After all, managers generally work within their own fairly isolated contexts, considering their own teams’ goals and results. They don’t generally have an opportunity to consider what other managers are doing, nor is it easy to obtain such insights.
As a result, most organizations can readily identify a least a few managers who tend to be overly generous in how they rate employees, perhaps as a means of avoiding conflict. And on the flip side, there are typically at least a few managers that no one can seem to please.
That’s why some companies use a calibration process to support the performance appraisal process. This involves bringing managers together so they can compare notes on how they’ve rated their employees – and why.
This helps validate performance appraisal outcomes – or prompts some managers to revisit their evaluations, to bring them more line with how other employees have been rated.
A recent study by the Society for Human Resource Management (SHRM) found that of companies using a calibration process, 35 per cent said the process leads to employee evaluations being changed on a regular basis, with a further 63 per cent saying evaluations are changed infrequently.
The two biggest reasons cited for the changing of employee ratings included that people managers were not rating employees consistently (69 per cent) and that people managers learned new information regarding an employee’s performance based on input from others in the group meeting (45 per cent).
These examples illustrate the power of a calibration process to help achieve greater consistency in how performance ratings are assigned. Such enhanced consistency can have a positive ripple effect. Employees will be more likely to regard the review process as fair. And decisions that use performance ratings as inputs – such as those pertaining to salary increases and promotions – will be better grounded.
A calibration process, however, can sometimes work against meaningful performance ratings. The SHRM study found that 39 per cent of respondents using such a process said they changed employee evaluations to fit the ratings to a planned distribution.
One of the challenges of this type of calibration is that it can generate performance ratings that are not seen as credible by either managers or employees. This can undermine the authenticity of the performance management discussion because the manager may no longer be speaking to a rating that he or she sees as valid. That can lead to managers disowning the performance appraisal process or simply blaming human resources in the event employees react negatively about how they’ve been rated.
Organizations that artificially limit the number of employees who can be rated as high performers through quotas or bell curves run the risk of creating a negative ripple effect. If employees feel there is little chance they will ever be highly rated they may become demotivated or less inspired to deliver their very best.
It may be helpful to take a step back and assess how well the organization’s performance appraisal process is working. An action plan may be needed if it’s not meeting expectations.
Claudine Kapel is principal of Kapel and Associates Inc., a Toronto-based human resources and communications consulting firm specializing in the design and implementation of compensation and total rewards programs. For more information, visit www.kapelandassociates.com.