Performance management in the workplace has a long history that dates back to the Industrial Revolution when technological advances created a need for better work processes, productivity, and quality.
In the 1950s and 60s, the US government established The Performance Rating, Incentive Awards, and Salary Reform Acts, which led to the employee rating systems and pay-for-performance models common today.
The performance review process has evolved over the years. Some of these changes have been good, some not so good, and the debate over the best path forward is ongoing.
Leaders are rethinking performance management, shifting away from the traditional review process, and moving toward a human-centered approach, with a focus on continuous feedback, engagement, and alignment. As more companies head in this direction, the more bias threatens to interfere with the performance review process.
How bias interferes with performance reviews
Everyone suffers from bias, unconscious or conscious; it's a part of human nature. Bias is inherent. Built into your brain, it causes you to make connections based on personal tendencies and individual experiences. These snap judgments override your good intentions to remain objective.
As a manager, it's important to understand the impact bias has on decision-making and your ability to be fair and impartial during the performance review process. Luckily, there are steps you can take to limit the impact of bias in performance reviews. Here's a list of common types of bias found in performance reviews along with how to spot them and tactics for how to avoid them.
"The vast majority of human decisions are based on biases, beliefs, and intuition, not facts or logic."
- Daniel Kahneman, Psychologist, Nobel Prize Winner & Author of Thinking, Fast and Slow
8 types of bias in performance reviews
According to a report by the Center for WorkLife Law, women, people of color, people with disabilities, older employees, the LGBTQ+ community, and first-time employees are the groups most often stereotyped as less competent in the performance review process.
Bias diminishes the objectivity you need to assess and rate employees. It threatens to compromise the performance evaluation process. The outcome negatively impacts pay and promotion opportunities for certain groups of people.
Here are eight common biases to watch out for during performance reviews:
Also known as "What Have You Done Lately?", this bias occurs when your focus is on the most recent behavior over the past few weeks versus looking at the full evaluation period.
Also known as "First Impression = Last Impression", this occurs when the information you retain is based on what you learned first about working with your employee.
The Halo and Horns Effect
This common bias is when you allow one good (halo) or bad (horns) characteristic of someone to eclipse everything else about their performance.
Also known as "Out of Sight Out of Mind", this is your instinct to favor and prioritize people who are closer to you than those who work in a different location or have different hours than yours. This bias is particularly relevant during a time such as now when remote work is prevalent.
Simply put, this is when you have a preference for one gender over another—whether consciously or unconsciously. An example of this is when you focus on the personality and attitudes of women versus the accomplishments and behaviors of men.
Leniency/Severity Rater Bias
This bias is when you rate someone lower (severity) or higher (leniency) than they deserve.
Central Tendency Bias
This tendency causes you to rate everyone in the middle, which can negatively impact those who deserve to be rated at a higher level.
Idiosyncratic Rater Effect
This bias occurs when you evaluate employee skills relevant to your level of the same skill.
Top 5 tips to interrupt bias in performance reviews
Bias is not easy to remove, but research shows it is easy to interrupt. Try these five Bias Interrupter tips from Harvard Business Review to help you mitigate bias in your next performance review:
- Establish objective criteria to focus on performance, not potential
- Clarify the metrics and explain the evaluation method
- Look at performance and skill-set, not potential and personality
- Encourage your employees to conduct self-reviews
Explain the promotion and pay decision process
Research shows that high-performing organizations are 2.6 times more likely to have their performance evaluations perceived as fair than lower-performing organizations. Conscious action in eliminating bias from your performance review process will result in fairer and more inclusive talent management and promotion outcomes, as well as a happier and more productive workforce.