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Employee Experience

The Top 10 Performance Review Biases

One of the most important things a manager can do is to complete a performance review for each of their employees. But when it comes to completing performance reviews, psychologists and researchers alike agree that managers naturally exhibit bias in their scores and ratings. This is often an unconscious action, but it still has consequences.

To be fair and objective, a performance evaluation must be based on the employee’s job-related behavior, not on their personal traits, gender, culture, work situation or other factors unrelated to the actual completion of job tasks.

Though subjectivity and partiality will never be completely removed from the performance review process, it’s important to keep some of our most common prejudices and biases in mind when completing performance reviews. This awareness will hopefully lead to consciously making adjustments to a more objective review score.

What is Performance Bias?

Performance biases occur when you make an assumption about an employee based solely on stereotypes. It’s important to recognize that these are not only necessarily cultural stereotypes but ones rooted in the workplace such as:

  • HR team members are strict and unforgiving
  • Everyone in the sales department is selfish
  • People in IT are unsocial
  • Older workers are “stuck in their ways”
  • Younger workers don’t want to work hard
  • Remote workers sit in their pajamas all day
  • Employees who don’t work late don’t care about the company

Understanding Performance Appraisals

Performance bias generally occurs during performance appraisals. When discussing performance appraisals we’re not talking about a singular “thing” but a broader process that takes place over a number of days and includes:

  • Taking the time to thoughtfully consider an employee’s performance
  • Measuring their performance against the established metrics for their position
  • Documenting constructive feedback in a performance review “form”
  • Sharing the evaluation and supporting details with the employee
  • Discussing next steps and setting goals

Many organizations have a “this is how we’ve always done it” process to facilitate performance appraisals. Others use HCM systems.

Performance Reviews—a Key Step

The backbone of the performance appraisal process is the performance review. Employee performance reviews are an important tool which, when used correctly, can impact the growth of your employee and in turn, the company.

Annual performance reviews should be conducted against a strictly defined series of metrics that have been built around the expectations for a role.

10 Common Performance Review Biases

One way, perhaps the easiest, to eliminate the proliferation of performance review biases is to shut down the performance appraisal process. But it would be unfair to employees, and the company, to stop holding performance appraisals strictly out of concern that there may be some form of bias used in their performance evaluation ratings. The more practical step would be to learn about some common biases and how to recognize them.

Knowing what type of language to avoid and what lenses to view a review through will help you to (hopefully) avoid any bias in performance reviews.

Below is a list of the 10 most frequent performance rating biases that occur during the performance appraisal process:

  1. Excessive Leniency
    Excessive leniency happens when a manager rates all employees higher than their performance warrants in an effort to be kind, supportive or well-liked. This occurs when:
    • a manager is more interested in cultivating friends than supporting employees.
    • a manager has a belief that an underperforming employee will be motivated by a positive performance review.
    • A manager wants to avoid conflict.
  2. Excessive Severity
    Managers tend to demonstrate severity bias when hoping to motivate average-performing employees. A manager with this bias tends to rate all employees lower than their performance warrants in an effort to inspire average employees to improve their performance.
  3. Similar-to-Me Bias
    This bias occurs when the manager gives higher ratings to employees who are similar to the rater. We tend to like and relate well to people who remind us of ourselves; however, this resemblance should not spill over into performance review ratings.
  4. Opportunity Bias
    Opportunity bias transpires when a manager credits, or faults, an employee for factors beyond their control. An example is when a manager rates a sales employee favorably overall due to one big sale obtained by a stroke of luck, rather than through normal sales channels such as meeting, cold-calling and prospecting.
  5. Halo Effect
    The Halo Effect occurs when an employee possesses one exceptional strength in a particular performance category and the manager allows this to carry over into other rating categories or to dominate the overall evaluation score. For example, if an employee excels in job knowledge, it doesn’t necessarily mean that they will also excel in the categories of “Attendance” or “Work Production” yet a manager may make that assumption and rate them highly in the later categories as well.
  6. Horns Effect
    The Horns Effect occurs when an employee has a weakness in one area and their manager allows this concern to creep into other rating categories or affect the overall outcome of the performance appraisal. For example, if an employee is especially weak in the category of “Customer Satisfaction” it’s not necessarily true that the employee may need to make improvements in the categories of “Job Knowledge” or “Problem Solving.”
  7. Contrast Bias
    Managers with contrast bias have a difficult time reviewing an employee based on their individual job performance. Instead they will contrast the employee’s work against what other employees have done.
  8. Recency Bias
    Recency bias occurs when the manager bases the evaluation on the last few weeks or months, rather than the entire evaluation period.
  9. Job vs. Individual Bias
    Job vs. individual bias occurs when a manager factors into their performance review the function of a position and its “importance” to the company. It is true that some positions are more visible but that doesn’t mean the employees performing those tasks are more vital than other members of the team. A performance review isn’t a referendum on a department.
  10. Length-of-Service Bias
    It’s important to remember that length-of-service is not a factor in evaluating performance. It’s important to avoid the “They should know better” or the “They don’t know any better” way of thinking. Long-term employees should be evaluated according to the same established company standard as other employees.

Impact of Bias on Performance Reviews

To understand why bias needs to be removed from the review process consider what’s at stake. Evaluations often direct:

  • Compensation
  • Promotions
  • Job assignments
  • Opportunities for skilling-up
  • Shift choices
  • Team leadership opportunities
  • Who is kept on a team and who is let go

When completed, biased reviews can either keep the right person from the right position or put the wrong person in the wrong position.

How Does Bias Influence Performance Reviews?

It’s a great idea to review these common biases with your management team prior to the commencement of performance appraisals, so your performance reviews are more accurate and objective in nature. When you can remove some of the bias from the evaluation process, performance appraisals become more meaningful for organizational decision-making and compensation adjustments. In addition, they become much more to the employee in assessing valid areas that need improvement.

Removing Biases from the Performance Appraisal Process

You can, in some respects, “train” yourself to avoid biases in performance reviews. Some examples of what that could look like include:

  • Have frequent 1-on-1s with employees to get a better understanding of what they are working on, where they are excelling, and where they might need help. This can help you avoid recency and job-vs-individual biases.
  • Talk to other managers and leaders to get a well rounded view of an employee’s performance. Chances are you’ll only have insight into 25% of their workday so finding out what that other 75% is like can help avoid Halo Effect or Horns Effect biases.
  • Be specific. Generalities can lend themselves to biases but targeted, specific feedback can more easily be tied to position metrics. This can help you avoid biases like contrast and opportunity.
  • Reflect on your own work situation and your career progress. This awareness can help you overcome similar-to-me bias.

Need Help with Performance Reviews?

Paycor HR allows your employees to add goals, track performance and interact with their managers from one point of contact. Easily track workflow processes online and receive alerts when an approval is needed, or a change has been made. Interested in learning more?