During a performance review, managers have a tendency to rate differently – some are naturally lenient while some fall on the opposite end of the spectrum. However, more often than not, it is the employees reporting to them that experience the brunt of these variations. This impact becomes crucial in an environment where employees are offered performance based remuneration/ incentives.
Normalization of scores is intended to introduce greater objectivity in the employee performance review software of an organization.
It may be observed from the figure above that Manager ‘A’ has the tendency to rate subordinates at 7 to 8 points on a performance rating scale of 1 to 10. Manager ‘C’, on the other hand, is highly conservative and the best ratings are still in the range of 5-6 points. Thus an average performer with Manager ‘B’ is equated with the best employee under Manager ‘C’ and with the lower average employees of Manager ‘A’. The training of Managers A, B & C on the rating norms may improve this trend subsequently . However, what should the company do with the evaluations already conducted? How has the company management looked into this problem which has an impact on promotions, compensations and career management of all employees? Some outstanding performers (placed under a harsh reviewer like Manager ‘C’) may quit the organization and some low performers (placed under a lenient reviewer like Manager ‘A’) could become tomorrow’s managers. This vicious cycle tends to boost average performers who cling to their jobs and promote mediocrity in the organization. A performance-driven company need to normalize the rating trends of their managers and weigh employee performance against the proper average rating.
Assume there are ten managers in an organization who are reporting to ten different executives each and they, in turn, report to three different senior managers. In this scenario, there are 13 different appraisers who are reporting on 110 employees in the organization. Among these employees, 100 are at the same level and 10 are at the managerial level. Each of the 13 appraisers has a different rating style meaning that employees reporting to them have a high degree of variability in their performance appraisal scores. The process of balancing this variability is called ‘Normalization’.
The process comprises the following steps:
In some organizations, normalization of performance scores is managed by a high level committee and this process is not transparent to the employees. If such committees consider the rating patterns of various managers such as MMi (discussed above), their decisions would be data based and objective.
‘EmpXtrack Performance Appraisal‘ is an enterprise level performance review software that executes all the normalization features of performance review discussed above, depending entirely on the client needs.