Employee Performance Review Bias

Employee: What’s up boss? What are you doing?

Boss: Evaluating you, your annual review is coming up

Employee: You’re just watching me on my computer. What are you evaluating?

Boss: Our standard performance goals Motivation, Teamwork, Problem solving, Decision Making, stuff like that

Employee: How do you get all that from just watching me right now?

Boss: Duh, Cause I’m a manager.

I’ll share common biases and issues with performance reviews and ways to overcome them.

Annual performance reviews can be interesting for both the employee and the manager. There’s often great intentions with performance reviews however the process is typically flawed by lack of a clear evaluation process, infrequent to no feedback, and rating biases that managers unknowingly carry.

I’ve heard a number of employee stories where staff have only received feedback regarding their performance from their boss during an annual review, some may have an additional mid year review but that’s it once or twice a year. This may be the first and only time staff hear about the things they are doing well at and the things they need to improve. For performance feedback to work it must be routine and consistent supported by planned follow up to discuss progression. It’s recommended to discuss performance feedback and evaluations with your staff at least once a month. This may be as simple as sharing what performance evaluations and feedback you have, highlighting progress, and most important sharing praise and acknowledgement to reinforce positive work.

Many times the dilemma for the manager is that the performance management system is deficient or incomplete. Proper performance management includes clear expectations and goals, coherent evaluation process that draws from a number of areas of performance like quality and productivity, and routine feedback delivery. If you do not have clear expectations and an apparent way to evaluate, it’s rather challenging for a manager to deliver feedback and for an employee to understand what is expected of them.

The third challenge with performance reviews is rating bias from the manager. These biases are prevalent and often unrecognized, unnoticed, they persist regardless of the performance review questions or ratings.

Clifton and Harter, author’s of the book, It’s the Manager, Moving from Boss to Coach, from the Gallup organization have identified 5 different common biases for performance ratings.

Personal or idiosyncratic bias — Managers favor and find the good in employees they like and who work how the manager would work.

Halo Effect — For employees who perform well in one area, the manager may overlook issues or development opportunities in another performance area.

The Middle Default — Managers gravitate to the middle, giving staff ratings in the acceptable middle, simply because they don’t have enough data, information, or discussions to support a higher or lower rating.

Leniency and Strictness Biases — As with the middle default, most managers rate in the middle, there are some who have a bias towards the extremes. Giving the benefit of the doubt, over appreciating satisfactory work and giving higher ratings than the data suggests. Or the managers who think no one is perfect, and look for any opportunity to highlight development opportunities and deliver low ratings for most staff.

Spillover Effect — Similar to the halo effect, managers let past performance dictate and drive their decisions for current employee performance, meaning a person who performed well last year, will often receive the same rating this year, regardless of their actual performance.

So these are the common challenges with performance reviews, lack of routine performance discussions, lack of evaluative data and information, and inherent rating biases. Again, performance reviews have great intentions and can be helpful to level set and understand how staff are performing. I certainly don’t recommend scrapping reviews altogether. You just have to put in the work up front to make they are effective, consistent, and fair.

Now to the recommended solutions. Make feedback part of your work routine, even if it’s simple praise to reinforce behaviors, but ensure your feedback is specific and not just ‘you’re doing a great job, keep up the great work.’ Identify specific behaviors that employees are using to be successful. Share opportunities for improvement when identified in a timely manner. Don’t sit on a bunch of feedback for a year waiting until annual review time. This is not helpful.

Establish performance management using clear expectations. Ensure your goals and expectations are something that is consistently measurable, goals like motivation and problem solving can be sometimes hard to measure and evaluate. Whenever possible attempt to have a mix of productivity and quality goals that you have a process to capture and evaluate. The Gallup authors from It’s the Manager found through their extensive research, it’s best to have goals that involve individual achievement, responsibilities of the employee, collaboration with team members, how effectively employees work with their team, and customer value (the impact of the employee’s work on the customer), this could be internal and external customers. To evaluate collaboration with the team, it may be helpful to gather peer feedback, and for customer value, customer feedback and satisfaction can be useful.

It’s also helpful to think about your rating scale for performance reviews. At my employer we used a 4 point scale with Exceptional, Successful, Developing, and Not Performing. This scale worked well for most situations and was often well received and easy to communicate.

Gallup recommends a five point scale with Exceptional, Outstanding, Above Average, Average, Below Average. This scale leans towards the higher performing side, which is designed to promote and encourage higher performance. I kind of like that idea. Gallup suggests designating outstanding as 1 in 10 employees and exceptional as 1 in 100 employees.

Whatever your scale is, it’s highly recommended to determine and decide as a rating group what constitutes the different ratings when considering your performance data and evaluations. Additionally it can be helpful to calibrate and provide this guidance to all raters to ensure consistency.

With any performance management system and review process you want to have various sources of information, performance data about productivity, the quantity or speed of their work, quality reviews and accuracy of work, potential internal and external feedback, from peers and customers. Depending on the employee’s role, it can also be helpful to have individualized goals if their work is different than others, or if there is some direction of development and growth they are on.

When it comes to biases, having multiple performance data sources and clear expectations, along with setting guidelines and calibrations for raters, can help minimize the different biases to get to a more accurate and fair performance rating.

Simple awareness of these biases and making sure to check yourself for any potential bias can have a significant improvement on reducing bias in ratings.

Again, performance reviews, although often flawed, are a great tool to understand performance of both the individual and the company. Putting in the effort up front with a performance management system, delivering routine feedback, and having awareness of potential bias, can move a good idea to an excellent administration. Good luck with your next employee review!