How to Avoid Bias in the Performance Review Process

You can be the greatest, most experienced leader and still suffer from bias. In fact, everyone does to some extent. Despite our best efforts, our thoughts and opinions are influenced by factors we’re not aware of.

It’s important to the engagement of your employees, efficiency of the workplace, and overall satisfaction to keep objectivity away from the performance review process. Unfortunately, bias is sneaky and sometimes goes unnoticed. By first being aware of common employee evaluation biases, you can take the necessary steps to prevent them. 

Here are 5 types of bias that commonly creep into performance evaluations and tips on how to avoid letting them happen in your office.

Horn Effect

The horn effect stems from a manager’s preconceived ideas about an individual employee.  The employee may be very diligent in their work—even a high performer by anyone else’s standard. Yet the manager believes them to be a lower performer based on specific past situations where they did not meet expectations. 

Overcome the horn effect by setting employee performance goals. Use the SMART goals method to define specific objectives the employee is expected to achieve during the review period so an employee’s success (or lack thereof) is indisputable. 

Halo Effect

The halo effect is the exact opposite of the horn effect. The manager always views the employee in a positive light because they excel in one area or exceeded expectations on a single initiative. Everyone has areas they can improve but the halo effect prevents the manager from seeing the big picture. 

Combat it with 360-degree reviews. Using this type of performance evaluation, an employee’s immediate team members, colleagues in other departments, and even direct reports are asked to participate. 

The 360-degree review counters bias by removing the chances that one person calls all the shots. It creates a balance of perceptions and ensures that the employee’s entire scope of work is considered. That means those soft skills that keep the team on track and the hard skills that may go unnoticed from the quieter folks aren’t forgotten.

Purposeful Bias

Purposeful bias occurs when managers sabotage an employee’s performance review because of their own insecurities. They fear their direct report’s success is a threat to their position or status with the organization. The purposeful bias often indicates a structural or cultural problem in the organization.

Prevent purposeful bias with career progression. Develop clear career paths for every employee so you prevent unnecessary competition in the workplace. Each employee instead focuses on their own tasks and goals rather than their coworkers’ performance. 

Take it a step further by having employees discuss their aspirations within the organization so they can begin to see what skills they will need to move that direction. Meaningful conversations around career development encourage employees to acquire new skills and take on challenges outside the scope of their immediate duties. 

Recency Bias

As the name suggests, recency bias is when a leader allows recent events to affect an employee’s performance evaluation. It’s a very common bias and tends to occur when there are long gaps between performance reviews. Let’s say you have an employee who has performed well for a long stretch, then made a big mistake right before their performance review. Unfortunately, that one misstep is likely to overly-influence the results of their evaluation. 

Help managers account for the totality of an employee’s performance with frequent feedback. Managers should meet with direct reports regularly to discuss priorities and the approach the employee should take. On-going performance coaching keeps employees on the right track and corrects any issues before they become larger problems. 

Additionally, managers can combat recency bias by collecting notes on the employee’s performance over time. When it comes time to complete a formal employee evaluation, the manager will have a comprehensive record of all the employees’ wins and losses to pull from. 

Contrast Bias

Contrast bias occurs when individual employees are compared against each other. That might sound reasonable—and some organizations use a “stack ranking” system in their employee performance reviews. However, forcing employees into specific categories or comparing performance isn’t only unfair. It also damages morale and creates an unhealthy, overly-competitive work environment.

The solution to contrast bias is to set clear expectations for every employee and evaluate them based on those standards. You’ll have broad standards for every member of the workforce but, generally. an employee should be reviewed based on their role-specific tasks and objectives. 

Leniency, Strictness, and Central Tendency Biases

There are always managers who tend to give their direct reports similar scores on every competency. Some are easy-going and always select high scores (leniency bias). Others are tough and veer toward the lower end of the rating scale (strictness bias). And then there are those managers who go right down the middle on every score (central tendency bias). The result is employees receive performance reviews that fail to help them learn what they’re doing well and what they can do better. 

Combat the leniency, strictness, and central tendency biases with goal setting. Set goals that align with the company’s mission and have distinct KPIs. When your employees know what is expected of them, they not only have the chance to be more productive, they also won’t be surprised when they receive reviews about their progress. As for the bias, the managers will know exactly what success looks like and will be able to review individual employees accordingly. The metrics of the KPIs create a distinction for those leaders who have any type of tendency when delivering reviews.

Recap: Prevent bias in employee performance reviews

Even the most well-intentioned managers are prone to biases when reviewing their employee’s performance. Fortunately, a modern performance management approach counters these common biases and ensures employees receive relevant, actionable feedback that makes sense to them. Let’s recap how your organization can prevent biases in employee performance reviews:

  • Define employee goals – Set objectives using the SMART goal method so managers have a point of reference for providing feedback.
  • Support goals with KPIs – Use role-specific KPIs to measure the progress an employee is making toward their goals. 
  • Use 360-degree feedback – Overcome any one rater’s biases by inviting multiple people to participate in an employee’s evaluation. 
  • Create career development avenues – Discuss career goals with employees at every level of the organization and be a partner in their professional development.
  • Provide frequent feedback – Give consistent feedback to ensure employees are always aware of how they’re performing.
  • Take performance notes – Create a historical record of an employee’s performance over time to inform formal performance evaluations. 

While rater bias occurs naturally, you don’t have to sit back and accept it. Create a modern performance review process so your organization has a structure in place to prevent and counter performance evaluation biases.