51% of employees reviewed in a survey think yearly evaluations are inaccurate. [Keka]

The reason is that evaluations are frequently biased, inaccurate, and discouraging.

Managers often believe themselves to be unbiased, and the same applies when they do performance reviews as well.

But the truth is that most performance reviews are biased, and the reason behind the bias can be as surprising as the results of the reviews. 

Performance review bias happens when the personal opinions or prejudices of managers affect how they review an employee's work. This can unfairly impact reviews, making it hard for employees to move up in their careers.

Common types of bias include the "halo effect" and the "horns effect."

The halo effect is when a manager likes one thing about an employee and gives them good scores across the board, even if not all their work is great. The horns effect is the opposite, where a manager lets one bad thing color their view of all an employee's work, giving them unfairly low scores.

Hidden biases about things like gender, race, age, or where someone comes from can make these problems worse. These biases can lead to unfair treatment, which may favor some employees over others, causing issues like decreased fairness and motivation, or even making employees want to leave.

It's important for companies to be aware of and tackle these biases. Doing so helps ensure that reviews are fair and equal, supports a welcoming work environment, and gives every employee the same chance to succeed.

There are several types of performance review bias that can impact the fairness and accuracy of evaluations. Let us look at some of the most prevalent ones:

1. The Halo Effect

What is the Halo Effect?

‍The halo effect happens when a manager's overall good impression of an employee unfairly boosts their ratings across all areas of performance, even those where they might not excel. This bias can lead managers to overlook weaknesses because of strengths in unrelated areas, leading to inaccurate performance assessments.

How to Avoid the Halo Effect

‍Managers should focus on specific criteria for each performance area to ensure their assessments are fair and based on actual performance rather than general impressions.

2. The Horns Effect

What is the Horns Effect?

‍The horns effect is when a manager's negative views about an employee affect their ratings across various performance areas. This can happen if a manager lets one mistake or flaw color their opinion of all other aspects of the employee's work.

How to Avoid the Horns Effect

‍Encourage managers to evaluate each performance area independently, without letting their overall impression be tainted by singular events.

3. Recency Effect

What is the Recency Effect?

‍The recency effect occurs when recent events unduly influence a manager's evaluation of an employee's performance. This bias can lead to an emphasis on recent actions over a more comprehensive review of the employee's longer-term performance.

How to Avoid the Recency Effect

‍Managers should gather performance examples from the entire review period, not just recent weeks, ensuring a balanced view of an employee's contributions.

4. Contrast Effect

What is the Contrast Effect?

‍The contrast effect occurs when an employee's performance is unfairly compared to that of their peers rather than being measured against set standards. This can lead to skewed performance ratings if the comparisons are not equitable.

How to Avoid the Contrast Effect

‍Use clear performance standards that apply to all employees equally, helping managers assess each individual against consistent criteria instead of comparing them to others.

5. Similarity Bias

What is Similarity Bias?

‍Similarity bias happens when managers give better evaluations to employees who share similar backgrounds or interests. This can lead to favoritism and unfair appraisals.

How to Avoid Similarity Bias

‍Promote diversity training and encourage managers to recognize and set aside their personal preferences when evaluating performance.

6. Central Tendency Bias

What is Central Tendency Bias?

‍Central tendency bias is when managers rate most employees as average to avoid extremes of good or poor ratings. This can obscure individual strengths and weaknesses and hinder accurate performance assessment.

How to Avoid Central Tendency Bias

‍Encourage managers to use the full rating scale provided, ensuring they accurately reflect the range of performance observed.

7. Leniency Bias

What is Leniency or Strictness Bias?

‍Leniency bias occurs when managers rate everyone too highly, avoiding conflict, while strictness bias is when they rate too harshly. Both can distort the true assessment of performance.

How to Avoid Leniency or Strictness Bias

‍Training for managers on fair evaluation practices and the importance of balanced feedback can help mitigate these biases.

Performance review bias often stems from subconscious processes and can significantly affect the fairness of evaluations. Here’s a breakdown of the key causes and how they can be addressed:

1. Reliance on Gut Feelings‍

Despite structured review processes, managers may prioritize personal opinions over facts, leading to biased assessments.

To counteract this, training programs should be implemented to help managers recognize and mitigate the influence of their personal feelings.

2. Office Politics and Interpersonal Relationships‍

Relationships and office dynamics can lead to biased performance evaluations. Establishing a culture of professionalism and emphasizing objectivity can help mitigate bias from personal relationships and preferences.

3. Time Constraints and Workload Pressures‍

Under tight deadlines, managers might rush evaluations, which can result in oversimplified and biased appraisals. Providing managers with efficient tools and training can help them conduct thorough and fair evaluations, even under pressure.

4. Organizational Culture and Norms‍

If a workplace culture values certain behaviors over others, it can lead to evaluations that favor those traits, potentially sidelining other important skills or behaviors. Promoting a culture of diversity, equity, and inclusion can help ensure all employee contributions are valued and assessed fairly.

5. Confirmation Bias‍

Managers may unconsciously look for information that confirms their pre-existing beliefs about an employee, which can distort performance evaluations. Encouraging a structured review process and seeking diverse perspectives can help reduce this bias.

6. Lack of Training and Awareness‍

Unintentional biases can creep into evaluations if managers are unaware of their own prejudices. Training managers on recognizing and addressing their biases can lead to more equitable and accurate performance reviews.

Biases Exist, So Does Solutions

It is common for managers to be unconsciously biased towards certain employees. However the problem begins when employees get performance reviews that are inaccurate.

To mitigate this issue, managers can conduct in-depth employee surveys to understand the areas where they feel a bias has occurred. ThriveSparrow can help you here by curating appropriate surveys that match the needs of the employer as well as the employees.