Performance reviews are biased. Annual reviews are even more biased. Although most managers strive to give fair, honest feedback to employees, natural biases inevitably enter. This article will discuss how biases affect annual reviews and harm employee performance. It will also discuss how managers can change their reviews to provide motivating performance reviews.
Annual Review Bias Mirrors The Reviewer’s Opinion of the Employee
As much as 62% of a rater’s judgment reflects the rater, not the person getting reviewed source. Managers place higher importance on their preferences, values, and beliefs. In fact, annual reviews were found to be overwhelmingly a reflection of the reviewer instead of the reviewed.
This can occur from experience bias, tribal bias, and the tendency for managers to view the world and their employees through their own interpretations.
Whether biases occur consciously or unconsciously, they harm employees. 10 of the most common review biases include same-as-me bias, leniency bias, halo/horns bias, and attribution bias. Managers often fail to give an objective employee review.
One of the best ways to reduce annual review biases is to maintain monthly notes that review individual employees. Managers can check the previous 12 months’ notes to write a more objective review. They can examine existing prejudices, opinions, and biases and challenge them.
Annual Reviews Reflect Recency Bias
Furthermore, recent bias means that managers remember and rank higher, more recent events than they do the employee’s overall performance. This means that performance reviews can become a memory game between the employee and the manager where distorted memories prevent objectional or valuable reviews.
Annual reviews tend to be an archaic form of assessment because they fail to provide timely reviews. They also set the stage for recent bias, increased comparison, and other biases. Annual reviews have been shown to have little effect on employee behavior, except for the time immediately following the review.
One of the reasons annual reviews are not very effective is because of employees’ tendency to have recency bias also. In an ever-challenging workplace, employees only retain about 10% of what they learn. Because of that, employees forget most of the annual review as new, pressing information grabs employees’ attention.
Agile Performance Reviews (Conversations) Improve Engagement
Employers striving to eliminate biases from employee reviews have turned to regular employee reviews. The Neuroleadership Institute firm studied 27 companies that got rid of annual performance reviews in favor of review conversations that happened monthly or quarterly.
22 of those companies previously tracked engagement. Every single one found that employee engagement improved with more consistent review conversations. The employers who employed monthly reviews saw more significant engagement increases.
Employees receive better, more specific feedback when regular, agile reviews replace the formal, annual review. When that feedback comes regularly, employees improve their performance.
But, review conversations instead of formal reviews open the way for employees to give feedback and increase employees’ openness to manager suggestions. It also increases the employee’s involvement in setting goals and gaining ownership over their performance.
Changing Reviews To Increase Performance
One of the key differences in agile reviews is that managers can discuss the ever-changing workplace with employees in real-time. Employees can pivot their focus and redirect their goals
Review conversations should happen quarterly, if not monthly. They should cover specific employee behaviors and performance but focus on the future. The employee and manager discuss goals and needs. Managers are encouraged to discuss employee behavior as often as they want to and are not limited to an annual review.
As managers have these conversations, they turn away from a ranking system (which encourages comparison bias). Instead, managers can discuss employee growth and the organization’s growth.
These growth conversations encourage employees to engage and improve performance overall. Instead of employees feeling pigeonholed, employees are encouraged to grow.
Why Review Conversations Transform Performance Management
Review conversations become fundamental to performance management because they incorporate six of the seven keys for effective recognition, as outlined by O.C. Tanner. According to the O.C. Tanner Research Institute, recognition should be Personal and genuine, Specific, Timely, Frequent, Connected to Purpose, and Presented in Person.
Frequent review conversations bring all six of these seven keys into employee reviews. Managers that give regular feedback will better remember specifics and provide personal advice. They continually connect employee efforts to organizational goals and purpose. Conversations are, by nature, usually held in person and allow for more genuineness than formal reviews.
Perhaps that’s why out of 100 companies that moved from an annual review to frequent review conversations, 100% of them say an improvement in employee engagement. Managers more naturally utilize effective recognition habits.
About Thanks
Thanks is a leading provider of a recognition-based platform that increases communication, builds teamwork, and makes recognition a part of company culture. Fast, easy and simple Thanks makes it easy to bring data-driven employee recognition to your entire organization. O.C. Tanner purchased the Thanks platform in 2019 to fulfill the recognition needs of smaller businesses.
Thanks customers benefit from the same decades of research in employee motivation and company culture that O.C. Tanner enterprise clients enjoy, but in a product that is geared for fast, easy and simple deployment. Whether you’re starting a recognition program or improving and expanding on what you already have, Thanks has everything you need to engage your people with effective, scalable recognition.