Peer-Level Calibration Committees

The process of having supervisors discuss, compare, justify, and potentially adjust their subordinates' performance ratings in a meeting with their peer supervisors is referred to as peer-level calibration. Although calibration committees are widely used, there is considerable debate about their value. We inform this debate by examining the effectiveness of peer-level calibration. Specifically, we examine the main benefits of peer-level calibration proposed by consultants and HR professionals: 1) increased availability of employee performance information, 2) increased consistency in applied rating criteria, and 3) elimination of performance rating biases. Our results indicate that calibration does indeed increase both the employee performance information and the consistency in applied rating criteria. Contrary to practitioners' claims but consistent with our predictions, our results also indicate that calibration does not fully undo supervisors' biases. Specifically, we find evidence that supervisor specific incentive-driven bias persists even after calibration. Thus, our results indicate that calibration affects the evaluation process in a positive way but that calibration does not fully resolve all problems inherent to subjective performance evaluation