Performance review bias

Are you guilty of showing bias in a performance review?

There is no doubt that organisations are relying on the performance data provided by managers to make critical business and employee related decisions. This information impacts employees in many ways such as decisions relating to their compensation, development or secondment opportunities, succession planning, bonus structures and considerations for promotions.

When so much relies on performance data, doesn’t it make sense for employers to work diligently to minimise or eliminate bias in the annual performance review?

Many organisations are starting to understand that when left unchecked, bias can undermine the efforts of workplaces to create an equitable performance system.

Objectivity is meant to be the foundation of an effective performance review process, but whether we like it or not, our brains have a natural tendency to sort information into groups without us consciously processing it.

What is unconscious bias?

Unconscious bias is learned stereotypes that are automatic, unintentional, deeply ingrained, universal and can influence a person’s behaviour.The subconscious mind can process 20,000,000 bits of information per second, however the conscious mind can only process 40 bit of information at any given time.This means that the brain relies on our subconscious to make decisions for us and this is where past experiences, assumptions and stereotypes can get in the way.

How can unconscious bias impact performance reviews?

Every manager falls victim to unconscious bias, it is about raising awareness and taking steps to minimise or ideally eliminate it. When unconscious bias is applied to the performance review process, it can and does lead to ratings being subject to the unfair treatment of employees based on aspects such as how much the manager likes (or dislikes) them, age, sex, religion, marital status, disability, sexual orientation and race.

The idiosyncratic rater effect

Some psychologists believe that managers are subject to the idiosyncratic rater effect, where the judgement of the manager takes priority over the performance of the employee. The idiosyncratic rater effect is the amalgamation of various biases that can impact a performance rating.

What are the common biases that I should avoid?

Halo bias

The ‘halo’ bias is common in performance reviews.It is when an employee is rated highly across their position, based on one thing that they do well.A common example of this may be a sales person that always exceeds targets, but they fail to meet report deadlines and don’t demonstrate teamwork. The manager may fall victim to the halo effect by awarding a high rating based on the one element of performance.

Horn bias

The horn bias is the opposite to the halo bias. The horn bias is commonly used when a manager rates an employee as having poor performance based on one thing that they have not done well.This could be missing a deadline or not hitting a target. When managers are not able to look at all areas of performance and focus on one negative, they have fallen victim to the horn bias.

Recency bias

Recency bias is very common and it is when the employee’s most recent performance or behaviour becomes the dominant factor for the performance review. This can swing both ways. A solid performer can participate in a meeting that doesn’t go well and this may be the thing the manager reflects on most when determining a rating.Conversely, a poor performer may do one thing well and the manager may forget the rest of the review period where performance is poor.

Contrast bias

Contrast bias occurs when the manager compares an employee’s performance to other employees instead of the company standard.When employees are ranked in comparison to each other, the reality is that someone must land at the bottom, even if they are reaching the company standard.

Leniency bias

The leniency bias is common where a manager has a number of direct reports. There is a temptation to give everyone a satisfactory rating, particularly when the manager tends to be more lenient than his or her peers. The leniency bias results in inflated and inaccurate ratings when the leader is overly positive about performance.

Purposeful bias

Although purposeful bias is not common – it does happen. Some managers can be threatened by high performing talent in their team and the manager may feel it necessary to downgrade a rating to protect their own position or to not lose their highest performer to another team or promotion.

What can I do to eliminate bias?

Accepting that bias exists is a great start to reducing or eliminating bias from performance reviews. The following are some tips to tackle bias in performance:

• Use analytics and data to spot potential biases – noteveryone likes using data in decision making, but analytics can be useful in providing evidence to back up performance decisions.
• Consider a continuous approach to feedback – when employees receive timely and regular feedback there is more accountability and transparency. This approach helps to keep the recency and halo/horn bias at bay.
• Use HR technology to capture performance achievements – when a performance management system allows for file notes and attachments, it is a great way to ensure that accomplishments are being considered by the manager when the review time comes around.
• 360 degree reviews – asking key stakeholders to provide input into an employee’s performance is a great way to eliminate potential bias as there are several checkpoints on performance.
• Benchmarking and calibrations – many employers are choosing to introduce a calibration process where leaders are asked to meet and ‘calibrate’ performance ratings. This approach works to ensure consistency of rating application and helps reduce leniency bias.
• Expanded rating scales – it is recommended that employers look carefully at the current rating scales to ensure that they are not vague and rely on manager interpretation. It can be very helpful to identify to leaders what a ‘poor performer’ looks like in terms of behaviour and performance, as an example.
• Monitor, train and review – it is very difficult to remove bias altogether, but manager awareness training will go a long way to reducing it. It is recommended that employers implement unconscious bias training and then monitor and review performance decisions.
• Seek an alternate opinion – it is a good strategy to seek an alternate opinion where there may be doubt.It can be as simple as asking another leader to look at the performance facts and give their opinion on a rating. This will challenge any hidden biases and keep the manager honest!
• Define and communicate the performance purpose – it is important that leaders have a clear and consistent understanding of the guidelines and preferred performance process.

The truth is, we are all guilty of falling victim to performance bias. No leader is immune from it and we must all make an effort to be aware of our own implicit biases. It is critical that employers work diligently to educate employees and eliminate bias from the performance process to ensure that outcomes are fair, consistent and most importantly – unbiased.