A blog post on bias in performance reviews.

The Rocky Relationship Between Performance Reviews and Biases

Performance reviews are a powerful tool when it comes to employee development and strengthening professional relationships. They are especially useful when used as part of a regular feedback cycle; usually consisting of regular 1:1’s, goal setting using OKR’s and giving feedback through praise or regular surveys all of which Frankli streamlines for companies. No matter how often or how effectively your company conducts performance reviews however, one thing is always guaranteed; humans conduct them and humans are prone to errors and biases. Whether it be a recency or tendency bias or any in between, here are some of the most common mistakes managers can make when conducting their performance reviews and some tips on how to avoid them.

The Horns Vs Halo Effect

This is when a manager casts judgement on an employee based on one good or bad thing about them, ignoring the fact they are a multifaceted person. For example, if a manager focuses on an employees sense of humour but ignores their poor time management skills, they are falling victim to this effect. An easy way to ensure you nip this one in the bud is to focus on tangible outcomes instead of on the employee’s personality. One way to do this is by focusing on an employees ability to meet goals and communicate rather than their witty comments.

Recency Bias

The bias in which a manager will be focusing on things that happened most recently, forgetting the good or bad things that happened in the past is known as the recency bias. This can happen easily in companies who don’t have frequent 1:1’s or check-ins. Managers become unaware of what is happening with their employees and don’t have their finger on the pulse. Recency bias can result in several things; the first is that employees who have behaved well previously but had a recent slip up can be, which in turn can demotivate. On the flip side, employees who have behaved poorly but had an excellent record are treated well and thus begins a cycle of rewarding behaviour which isn’t of value to the company overall. Finally, recency bias can result in a rewarding company behaviour which doesn’t fit in with the company core values. An excellent way to combat recency bias is to have regular check-ins and 1:1’s with your employees. By management knowing what their employees are up to means that managers have a broader understanding and view of their employees.

Central Tendency Bias

Next is the central tendency bias in which managers are more likely to avoid extreme scores and ratings during a performance review. Often this is simply down to managers not wanting to be too harsh or too kind. They feel that going somewhere in the middle is safe and less likely to cause offence or be seen as favouritism. Managers prefer to rate employees in the middle instead of giving them a score they may deserve, which is extremely high or extremely low. Falling victim to this bias is very easy but has catastrophic results for the company and its performance review system. Giving every employee an average rating or score means that no one gets the grade they deserve. All results are slightly skewed, and employees become demotivated as people who don’t work as hard are getting similar results to them. An excellent way to avoid this in a performance review is to base scores and ratings on tangible outcomes like goals completed. Did they do it well, average or bad? That’s the best way to ensure that employees get scores they deserve.

Confirmation Bias

Finally, there is confirmation bias, and this can be a massive hindrance on performance reviews. This is when a manager has a preconceived notion of an employee and looks for reasons to confirm their belief. This results in a skewed and biased performance review system that rewards and demotivates the wrong people. To combat this, managers should focus on what the employees have achieved and carried out in their work as well as hold regular 1:1s. Having these interactions means the manager has a well-rounded view of their employees, minimising bias and unfairness based on irregular meetings.
Performance reviews are a handy people management tool that can not only benefit the company but the company’s people but if biases are allowed to seep in, performance reviews become inaccurate and a waste of time. If you would like to know how Frankli can help your business in the area, get in touch with us today.
Sources: Gunnigle, P., Heraty, N. and McDonnell, M. (2011). Human resource management in Ireland. 4th ed. Galway: Gill & Macmillan.