What is performance calibration?

Performance calibration is a process organizations use to ensure consistent, fair, and accurate employee performance evaluations. It involves managers or supervisors discussing employee performance ratings and feedback to align and standardize performance assessments across departments or teams.

What is the purpose of performance calibration?

The primary purpose of performance calibration is to ensure fairness and consistency in employee evaluations.

The calibration process ensures that managers:

• Appraise past work within a set period fairly—this period must be the same for everyone (e.g., a year, six months, etc.)
• Appraise employees in similar roles or job levels against similar standards and competencies
• Fully understand the performance scoring system, including specific criteria for each performance rating
• Discuss and challenge each other's ratings, ensuring decisions are grounded in objective criteria and consistent standards

This collective approach reduces the impact of personal biases, favoritism, and other subjective influences, leading to more equitable and accurate performance evaluations.

More accurate and consistent performance data supports better decisions regarding:

• Promotions
• Rewards and recognition
• Development opportunities for low and top performers

What does a performance calibration process look like?

Performance review calibration meetings typically happen toward the end of a performance review process.

A performance review cycle typically has eight key stages:

• Define expectations: Clarify what each worker must achieve to score a particular rating (e.g., performance criteria, quantitative metrics, OKR accomplishments, etc.)
• Prepare the performance review: Decide who will provide feedback—you might incorporate upward, downward, and peer feedback into a 360-degree review cycle
• Review your performance appraisal rating scale and questions: Check the language used in your questions to avoid asking leading or loaded questions
• Prepare for calibration: Managers gather performance data and prepare preliminary ratings for their team members
• Hold a calibration session: Managers meet to discuss and review the preliminary ratings, providing input and feedback on each employee's performance
• Discuss and align: Managers discuss discrepancies and outliers, share observations, and align on performance standards to ensure consistency
• Finalize ratings: Managers adjust the preliminary ratings based on the discussion and agree on the final ratings—some companies also use calibration discussions for performance distributions (e.g. using the bell curve with target percentages of upper and lower rating distributions)
• Deliver feedback to direct reports: Managers communicate the final individual performance ratings and feedback to their team members and discuss next steps depending on their overall ratings (e.g., plans to improve employee performance, or preparing high performers for team leadership)

Free resources: Performance calibration templates (spreadsheet and meeting guide for HR teams)

Who should be involved in the performance review calibration process?

The following stakeholders are typically involved in a performance calibration process:

• Supervisors and managers who are responsible for delivering feedback to their direct reports
• The senior leader for the specific business unit whose performance is under review who can clarify the unit's objectives and holds the critical data for measuring performance
• HR professionals who will be the facilitators for the entire calibration process and ensure alignment on the rating system

This calibration committee will meet to review the overall ratings and justify the rating delivered to each person.

What are the benefits of performance calibration?

By bringing managers together to review and align employee ratings, organizations can eliminate biases, promote fairness, and improve the overall reliability of their performance management system.

Reduce rater bias to deliver fair reviews

Every single reviewer brings their set of biases to the table. Even with the best intentions, we all have unconscious biases that affect our ability to deliver fair reviews.

We can't eliminate all our biases—they're a natural cognitive response—but we can take steps to minimize them. The first step is becoming aware of some common biases and then using the calibration stage to check if they've infiltrated your evaluation process:

• Recency bias: When reviewers remember the most recent events and forget the work their direct reports completed six months ago
• Primacy bias: When a manager's first impression of a reviewee dominates their performance evaluation
• Distance bias: When managers favor employees closest to them over those farther away—this bias is prevalent in remote and hybrid work environments.
• Similarity bias: When managers favor employees they feel are similar to them (regarding hobbies, backgrounds, or beliefs)
• Leniency bias: When managers sympathize with employees who clearly try hard but don't quite make the grade, they may assign a generous performance score as a motivational tool, which is unfair to other employees who have outperformed them

Generate consistent performance ratings

Picture this: When a hospital opens a box of thermometers, the medical staff must know that each device is calibrated to measure temperature consistently. They want instruments that will accurately analyze a patient's temperature so they can diagnose their condition and build a treatment plan based on their current vital statistics. A faulty thermometer that measures temperature much lower or higher than standard Celsius or Fahrenheit scales could result in missed opportunities to prescribe treatment, with potentially serious outcomes.

Calibration in performance management works the same way—it's all about consistency and equality. When reviewers adhere to strict performance standards, you can trust every employee has received a fair appraisal.

Increase trust in performance reviews

Employee reviews haven't always had an excellent reputation. Gallup research reveals that only 29% of employees believe their performance reviews are fair. And only 26% confirm they're accurate.

However, this changes when your workforce knows you are allocating the time to make performance management fair. Calibration promotes a culture of fairness, continuous improvement, and accountability within the organization.

McKinsey research confirms that 60% of employees who believe their company's performance process is fair also believe it to be effective.

Improve employee engagement and performance

When employees perceive the appraisal process as fair, it enhances their engagement, motivation, and trust in the organization. Higher motivation then leads to better team collaboration and higher productivity.

Our employee feedback statistics confirm this—65% of employees claim they'd work harder if their managers actively recognized their efforts through feedback.

Free resources:

• 9-box grid template
• Performance improvement plan Word template
• 70-20-10 employee development plan template

How does performance calibration relate to other HR processes?

Performance calibration is closely related to several other HR processes, including:

• Performance management: A critical component of the overall performance management process is ensuring performance evaluations are fair and consistent—calibration ensures this
• Talent development: Calibration helps identify low and high performers and development needs, informing talent development and succession planning
• Recruitment and onboarding: Insights from performance calibration can inform recruitment strategies by highlighting the competencies and attributes most valued and needed in the organization
• Compensation and rewards: Performance calibration ensures performance ratings are fair and consistent, which is crucial for determining merit-based pay increases, bonuses, and other rewards

Additional resource: Effectively Manage Payroll in 2024 With Our Step-By-Step Guide

What are some common challenges in the performance calibration process?

Some common challenges in the performance calibration process include:

• Inconsistent standards: Ensuring consistent performance standards across different managers and teams can be difficult
• Time and resource intensive: The calibration process can be time-consuming for managers and HR teams, particularly in large organizations
• Resistance to change: Managers may resist adjusting their preliminary ratings, leading to conflicts and delays in the process
• Communication barriers: Effective communication and collaboration among managers can be challenging, especially in global or remote settings

Additional resource: Learn how to overcome these challenges with our guide covering best practices for effective performance calibration meetings.

Simplify performance calibrations with Deel Engage

Deel offers performance review software with in-built calibration to take the legwork out of the process. With Deel Engage, you can:

• Automate the gathering of performance data (e.g., goal tracking, 360-performance reviews, skill assessments)
• Track and compare ratings with performance analytics
• Assign calibration tasks to relevant stakeholders
• Once calibration is complete, share the new results with workers—they will only see calibrated scores and feedback

Moreover, the learning and career development modules will help you identify skills gaps and provide targeted training and development programs.

Learn more about the Deel Engage and how to use it to create high-performing teams.