In performance reviews, how is the average rating for the self-rating and manager rating calculated? Is it calculated for each section or only for the entire review?

The “final” average rating is actually an average of averages. The Engagedly system first calculates the averages within each section and then uses these averages as an input to calculate an overall average of all sections. This is then rounded off to a single decimal. If you have enabled weights, then the final calculations are arrived at using weighted averages.