Is it that time again? I’ve often heard supervisors ask that very question when it’s time to conduct an employee performance review. I’ve yet to meet a manager — or an employee for that matter — who enjoys the formal performance review process.
If they’re so painful, then why conduct performance reviews? Because performance appraisals offer a means for discussing, planning and reviewing the performance of each employee. Regular performance appraisals help employees clearly understand their responsibilities, provide criteria by which their performances are evaluated and suggest ways in which they can improve performances. Performance appraisals also help identify employees with potential for advancement within the company, help managers distribute and achieve departmental goals and provide a basis for awarding compensation based on merit.
Since performance appraisals influence salaries, promotions and transfers, it’s critical supervisors remain objective in conducting reviews and assigning overall performance ratings. In other words, it’s an opportunity to get everyone on the “same page.” Ideally, performance appraisals constitute a forum for supervisors and employees to discuss current performance and set goals.
Formal reviews should be conducted at least annually, although some employers choose to do them more frequently. Between reviews, supervisors should provide ongoing feedback to their subordinates. There should be no surprises during the formal review process. Performance reviews are most effective when they’re conducted as a dialogue. Supervisors should listen, accept feedback and provide feedback. The review is about the discussion, not the form.
That said, there are pitfalls, or rather errors, that can occur and skew performance ratings. According to Wayne State University, the most common errors include:
The attractiveness effect — the well-documented tendency for people to assume that people who are physically attractive are also superior performers.
Attribution bias — the tendency to attribute performance failings to factors under the control of the individual and performance success to external causes.
Central tendency — the inclination to rate people in the middle of the scale even when their performances clearly warrant substantially higher or lower ratings.
First impressions — the tendency of managers to make an initial positive or negative judgment of an employee and allow the first impression to color or distort subsequent evaluations.
Halos or horns effect — the inappropriate generalizations from one aspect of an individual’s performance to all areas of that person’s performance.
High potential error — confusing an individual’s future potential with his or her current performance
Negative and positive skew — the rating of all individuals as higher or lower than their performance actually warrants.
Past performance error — permitting an individual’s poor or excellent performance in a previous rating period to color the manager’s judgment about performance in the current rating period.
Recency effect — the tendency for minor events that have happened recently to have more influence on the rating than major events that occurred months ago.
Similar-to-me effect — the tendency of individuals to rate people who resemble themselves higher than they rate others.
Stereotyping — the tendency to generalize across groups and ignore individual differences.
How does one overcome these potential rating errors? The major cause is a lack of training. Supervisors can avoid committing these errors once they understand them and how they occur.
In addition, good performance documentation is key to overcoming rating errors. Written notes, regularly updated, can also serve as a source of specific information for coaching and counseling and as required documentation for progressive discipline cases.
Clear definition of employee objectives and performance expectations are also important. If both the manager and employee have a clear understanding of what is expected on the job, the entire performance evaluation process becomes much more effective.
Now, happy reviewing.