Bias blights performance reviews


If – like many others – you have long suspected that performance appraisals are either an unscientific lottery or just a measure of your popularity with the boss, there is new evidence to back your hunch. Because new research has revealed that the majority of employees who report to multiple bosses get completely inconsistent ratings.

Personnel Decisions International (PDI), a Minneapolis-based consultancy firm, examined the records of almost 6,000 employees reporting to two bosses who were rated as being outstanding performers by one of their managers.

What emerged was that this high opinion wasn't shared by the second boss. In fact these star employees were rated lower by their second boss 62 percent of the time and much lower - "somewhat above average" or less - 29 percent of the time.

The figures, said Brian Davis, PDI executive vice president, highlighted the almost universal problem of bias in ratings and appraisals. "This basically means that bosses are rating employee performance through their own biases. Some bosses tend to rate employees on how well they like them, rather than how well the employee performs," he said.

"Other bosses tend to have their own rating systems where, for example, they rate everyone well. The problem with rater-bias is that it takes away the organization's ability to objectively use data from performance evaluations with any validity."

To support this claim, the research found that of the 5,970 evaluated employees, 80 percent received an "above-average" rating from at least one boss.

Yet of those who received this "above-average" rating from one boss, 30 percent of the other bosses rated the same person in the bottom third of the distribution.

Davis said that the only way to compensate for this inherent human bias is to use assessments that measure against specific standards on competencies and behaviours.

"By knowing which skills and competencies are important for the work and what types of behaviors constitute an average rating compared to an above-average rating, for example, the entire validity and value of performance evaluations greatly improves," he said.

"When standards are not used, you can't count on the objectivity or accuracy of a performance assessment, and you have no differentiating data that allows you to make confident decisions about promotions, training or leadership development.

Most companies spend hours conducting performance assessments on each employee, Davis continued, but many are essentially leaving their talent management decisions to chance by relying on gut feeling and personal perception rather than quantifiable data.

"Implementing performance management processes that accurately and objectively measure performance and get rid of rater-bias provide a more solid foundation for better talent management decisions," Davis concluded.

"This allows you to get the right people in the right positions."

Older Comments

1. The issue with standards is that unless you can base them on objective outcomes (e.g. revenue generated for a salesperson) then they can be subjectively applied - which negates their purpose. Removing subjectivity from employee evaluations is probably impossible for many roles.

2. The other question to ask is: is the performance of the employees in the survey for one boss the same as for the other? If not, then both bosses might be right....

Matt Moore

How can rating systems which profess to be objective rely of differentiation based on fine adjectival shadings. To me there are only 4 ratings: Above average: promotable. Average: can be improved with training. Below average, but improving: will reach the average or better; train this person. Below average; will probably not make it: look for another posting; possibly with someone else. Anything else is button sorting or basket weaving.

I work in the international mining industry

John McDougall

Very interesting