I'm a new manager of about 6 months to a small software engineering team and we, like most companies, have recently started our annual review process. I've been in the field long enough to know that this is mostly a Dog And Pony Show but, be that as it may, it still needs to be done.
As part of the process each team member is given a rating of 1-3, 1 being under performing, 2 being successful, and 3 being exceptional, with most people falling on a 2. A couple of my team members in particular have been killing it, and I tell them as much in our 1-on-1's. So for their reviews I gave a 3. My manager was in agreement.
A couple weeks pass and my fellow managers and I go to a meeting with corporate HR. In this meeting we're told that it is expected 15% of employee reviews will end up as 3's and our department has around 30% so we need to "calibrate" that to 15%, and change any wording in the free-form part of the review "as appropriate". This means I need to pick one of my two over-performers and give them a 2. Frankly I feel a little disgusted but I don't know if this is common or not.
I've been on the other side of the table where I was told I was doing exceptional and going above and beyond only to land a review that was right in the middle at the end of the year. In my early days I got huffy and fought it, to no avail. As I got older I learned it was BS and looked only at the compensation change.
I'm expecting a similar response from my team members. Eg. "How could I get a 2 if you've been telling me I'm doing exceptional?"
So my question is: How do I effectively communicate this rating to my team member while remaining professional? I could come right out and say "the company made me give you a 2" but I don't feel that's a good idea. In the past I would be told something along the lines "Oh, 2 is actually really good! 2 is right where you want to be!" But that never worked on me and I don't expect it to work on any of my teammates. I asked my manager for advice and he said basically the same thing; tell them that 2 is actually really good. He's been here a while and seems resigned to HR's decision. In fairness, in not really a big deal in the grand scheme of things but, probably because I'm new to this, it doesn't sit well with me. I brought my concerns to HR and got back a boilerplate response of "we need to calibrate to 15%" with no recommendation on how to handle the communication. I escalated within the HR chain of command but have not heard anything back.
- Both team members in question are getting a promotion which comes with a compensation and title change. So that's good. This will have the largest impact on their compensation.
- The change from a 3 to a 2 will impact how much of a merit increase I can give, though I haven't been able find out exactly by how much.