Common biases operating in performance appraisal - a must read for managers doing reviews

Performance appraisals are always sticky for everyone. While managers make an effort to be as objective as possible, there are always concerns about specific performance appraisals, and their accuracy. If you are going to evaluate your staff, then it is wise to be aware of factors that may affect your assessments. In this short article we outline a few factors you should be aware of, so that you can examine your own assessment processes to ensure that they are as free from bias as possible.

Halo Effect

The halo effect is the tendency to rate someone high or low in all categories because he or she is high or low in one or two areas. Results in appraisals that do not help develop employees, because they are two general or inaccurate as to specifics. Evaluating someone lower is sometimes also called the "devil effect".

Standards of Evaluation

If you are using categories such as fair, good, excellent, etc, be aware that the meanings of these words will differ from person to person. In any event, the use of these categories is not recommended because they do not provide sufficient information to help employees develop.

Central Tendency

The habit of assessing almost everyone as average. A person applying this bias will tend not to rate anyone very high or very low.

Recency Bias

Tendency to assess people based on most recent behaviour and ignoring behaviour that is "older".

Leniency Bias

Tendency to rate higher than is warranted, usually accompanied by some rationalization as to why this is appropriate.

Opportunity Bias

Ignoring the notion that opportunity (factors beyond the control of the employee) may either restrict or facilitate performance, and assigning credit or blame to the employee when the true cause of the performance was opportunity.

False Attribution Errors

We have a tendency to attribute success or failure to individual effort and ability (at least in North America). So when someone does well, we give them credit, and when someone does less well, we suggest it's somehow their fault. While there is some truth in this, the reality is that performance is a function of both the individual and the system he or she works in. Often we misattribute success and failure and assume they are both under the complete control of the employee. If we do, we will never improve performance.