Managers assign ratings to employees based on their personal opinions during the performance review process. One approach that strikes a compromise between evaluation pattern differentiation and variability is normalize rating. It is standard practice in both large and small businesses. The goal of normalizing scores is to increase the impartiality of an organization’s employee performance assessment procedure.
The following steps make up the normalization process:
The rating pattern of all reviewers at the same level in a company, across different departments, is statistically averaged. Let “M” be the meaning here.
The statistical mean is calculated for all ten managers in the aforementioned example, or for each appraiser at the same level. Over time, each manager would have evaluated 40 to 50 workers. “Mi” is this mean (i = 1 to 10).
For each of these managers, a correction factor (CF) is then calculated using the formula CF = Mi/M. For instance, if a manager’s rating pattern matches the statistical managerial mean, its value will be 1.0.
The normalized CF, which is subsequently used for management choices, is calculated by dividing each employee’s performance score by the CF for his or her boss.
