Many organisations practice calibration of performance scores after completing performance reviews. But does the practice not promote distrust and compromise the manager subordinate relationship?
In short, the answer could be no. If the possibility of calibration is communicated up front and if the reasons for the change are clearly communicated, then the risk is reduced. Also, the immediate manager should take the responsibility for any changes. In practice, this is often not the case. Often the intent to conduct calibration that affects performance scores is not communicated. And managers often don’t take responsibility if a score is changed. Senior management or HR is blamed. Sometimes employees are not even made aware of the score change even though salary increases and bonuses are determined by these ratings.
Consider for a moment the implications of this. Immediately the employee/manager trust relationship is brought into question. “Does my manager have my back?” “Why does my manager believe that I am worth a particular rating and why has it now been changed?” Then we wonder why performance appraisals are so unpopular among employees.
Another challenge is that to change an overall score it may be necessary to adjust ratings for individual objectives and KPI’s. Which KPI or objective must be changed? And when is this done? Often the time available between the completion of reviews and salary and bonus decisions is not very long. Is there enough time to do it properly?
So, is there another way? One solution is to dispense with calibration of performance scores and rather focus on educating managers. This will help them to conduct reviews more accurately.
But because scores are always positively biased, the salary increases and bonuses cannot be allocated to these scores until they are adjusted. It would mean that the salary % increase or bonus total would exceed the budget. The budget is set against performance based on a normal distribution.
But if salaries increases are adjusted (calibrated) while maintaining the integrity of performance scores, then the budget can be met. In other words, the same percentage is taken off each employee to meet the budget but without changing the performance score.
Subsequent analysis of performance scores can then inform educational initiatives. Comparisons can be made between real business performance and people performance.