Performance reviews are crucial for tracking employee progress, driving improvements and ensuring top performers are recognised and rewarded. But measuring performance fairly and consistently isn’t always easy.
After all, while managers may be using the same scale to assess their employees, there’s no guarantee they’re interpreting or applying it in the same way. And issues like unconscious bias and favouritism can lead to some employees receiving higher or lower ratings than they really deserve.
Enter the calibration session: a crucial moment where managers come together to compare and review the performance ratings they’ve given their reports, ensuring they’re consistent and fair. We’ll talk more about the importance of calibration sessions — and our tips for running them successfully — in this article.
The calibration process at a glance
Performance review calibration is the process of assessing and validating performance ratings awarded by individual managers. In very small organisations, HR may simply meet with managers one-on-one to ensure they are properly applying the approved performance rating scale. But in most larger companies, calibration is done by committee.
This typically means that a group of managers in the same business unit will come together to discuss and validate the ratings they’ve each awarded to their direct reports. These meetings are generally facilitated by a member of the HR or People team. Here’s how that process might look in practice:
- Each employee is rated on a pre-determined rating scale by their line manager.
- Managers share performance ratings and justifications with one another in a calibration meeting led by HR.
- The committee discusses and challenges each rating until consensus is reached, adjusting it if necessary.
- Agreed ratings are approved by the executive team and communicated to employees by managers.
These final ratings are then often used to inform compensation decisions as part of the compensation review process. For example, some companies may award a set percentage increase to everyone as long as they have achieved at least a certain performance rating, while others give raises only to top performers.
4 benefits of effective performance review calibration
Calibration sessions ensure performance ratings are fair and objective — and not based on the subjective opinion of one manager alone. Here are some of the biggest benefits of incorporating effective calibration sessions into your performance review process.
1. Improves objectivity and reduces bias
When performance ratings are left to individual managers, various forms of bias can come into play, including:
- Prove-it-again bias: When some groups of employees are required to show a particular competency over and over again.
- Tightrope bias: When a wider range of behaviour is considered acceptable for some employees than others.
- Halo and horns effect: When one positive or negative characteristic overshadows other aspects of performance.
- Affinity bias: When managers are more likely to positively assess employees who are most similar to themselves.
You can read our full guide to removing bias from performance reviews for more details on these and other forms of bias. The point is, discussing ratings with others helps ensure they’re based on team-wide standards, not gut feelings.
2. Keeps things consistent across the organisation
Different managers have different ways of rating employees. For example, one manager may give an employee a 3 on a 5-point scale if they are meeting all of their expectations but not exceeding them — while someone else may consider this a 4 or 5.
To avoid this, HR should ensure performance rating scales are clear and consistent, and that managers understand how they should be applied. Effective calibration acts as a final check that helps to ensure consistency across the business, enabling employers to track performance over time and make comparisons between different departments.
3. Fosters trust and builds credibility with employees
When employees don’t get the result they’re expecting from a performance review, they might feel confused, disappointed or frustrated. But they’ll likely feel even worse if they think they’ve been rated unfairly.
Strong processes, including effective calibration sessions, enable managers to clearly explain the why behind a particular performance rating. The fact that the decision has been made according to a consistent, repeatable process — and sense-checked by other managers — helps employees see they are fair and objective, even if it’s not the news they were hoping for.
4. Lays the groundwork for equitable compensation
Money is a big motivator. And tying pay to performance can encourage employees to work hard and improve their performance over time. However, companies that use performance ratings to inform compensation decisions need to be 100% sure that those ratings are fair and consistent. This is particularly true in the context of the EU Pay Transparency Directive, which is currently being rolled out across Europe.
Effective calibration sessions ensure that everyone’s performance is being rated on the same scale, using the same criteria. This means that pay decisions based on performance scores are both fair to employees and justifiable under pay transparency legislation.
How to get performance calibration right: top tips to follow
As we’ve discussed, calibration sessions are crucial to ensuring fairness and pay equity. However, they can also be a lot of work for HR and managers alike, and can even introduce problems of their own. Here are a few tips to help you get them right.
Set clear, explainable criteria and rating scales
Calibration sessions should be about validating performance ratings for each employee — not arguing about what each rating means. That means managers should fully understand the rating scales and criteria your organisation uses ahead of time.
For example, your performance review process might involve rating employees on a five-point scale from ‘unsatisfactory’ (1) to ‘exemplary’ (5). However, you shouldn’t just leave these terms up to interpretation. Instead, provide detailed guidelines on what each rating actually means, with practical examples.
Create a structured process (and stick to it)
Everyone involved in the calibration process should also have a clear understanding of its purpose and how it will work. To help everyone prepare, it’s a good idea to send out an agenda ahead of each calibration session. For example, your agenda might include the following steps:
- Group reviews performance criteria to ensure understanding
- HR gives an overview of the calibration process and answers any questions
- Managers present ratings and evidence, group discusses and validates
- HR presents a comparative analysis to help identify outliers
Whatever the process looks like at your organisation, the role of the People/HR leader is to act as a facilitator for the meeting, keeping discussions focused and constructive.
Help managers identify and call out bias
Calibration meetings are designed to stamp out bias in performance reviews — but it’s not always easy to spot. And in some cases, making decisions by committee can even make bias worse.
Providing training on the different types of bias that can impact performance reviews is a good starting point. You may also want to share equity metrics — like your gender pay gap, salary band positioning for different groups, etc — at the beginning of each calibration meeting to keep these issues top-of-mind.
During calibration sessions, the HR facilitator should point out when discussions have veered away from performance and into bias territory. Alternatively, you could bring in neutral ‘bias interrupters’ specifically to fulfil this role.
Set aside enough time for meaningful discussions
There’s a lot to discuss in a calibration meeting, and ensuring you get to everything takes a little consideration. First, save time by giving managers everything they need to adequately prepare for the meeting in advance. For example, you might circulate initial ratings and ask managers to flag particular cases they would like to discuss ahead of time.
It’s also a good idea to assign a set number of minutes for discussing each employee, with additional time for complex or controversial cases. During the meeting, the HR facilitator’s role is to keep things on track. They should continue to move the meeting along by asking the right questions and bringing the discussion back round if it goes off-topic.
Keep performance and compensation cycles separate
Performance and compensation may be closely linked, but you don’t need to have both conversations at the same time. In fact, it’s a good idea to completely conclude your performance evaluations — including calibration sessions — before your compensation review cycle begins.
This is best practice for a few reasons. First, discussing both things at once could lead managers to artificially inflate performance ratings in the hopes of securing pay increases for their teams. And employees may find it hard to concentrate on important performance concentrations if all they can think about is whether or not they’re getting a raise.
Separating performance and compensation also ensures only final, calibrated performance ratings are taken into account for compensation decisions, keeping things as fair and objective as possible.
Keeping compensation fair and effective in 2025
In 2025, employers need to be able to justify every compensation decision they make. While performance reviews and calibration sessions are key, they’re only part of the solution. Employers also need to set up consistent, scalable pay structures that ensure pay decisions are fair and consistent across the organisation. And for that, you need the right tools.
Figures is an all-in-one compensation management system that gives you everything you need for fair, effective compensation. You can use Figures to benchmark salaries against the market, create customised, scalable salary bands, and even run smoother, more effective compensation reviews — with performance data built right in.
Want to learn more? Book your free demo to see Figures in action.
