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Bias Found in Employee Appraisals

New research shows vast discrepancies in employee appraisals for workers who report to two bosses. But can bias and subjectivity ever be eliminated from the process, or should appraisals be eliminated entirely?

By Michael Felton-O'Brien

New research of nearly 6,000 appraisals of employees who report to two bosses found that while the workers were rated as "outstanding performers" by one boss, the other boss didn't often agree with that assessment.

More than six in 10 times (62 percent), highly rated employees were given lower than "outstanding" ratings by the other boss, according to Personnel Decisions International, a Minneapolis-based consultancy. About one-third of the time (29 percent), employees were given much lower ratings, including "somewhat above average" or below average.

"The fact that such a discrepancy [in appraisal results] exists is noteworthy," says Brian Davis, PDI executive vice president. "Increasingly, we look to make promotions on the basis of performance, and if we're relying on a simple, overall rating, [this research shows] we're going to make a lot of mistakes in who we put in key jobs."

While Davis says he thinks the research clearly points to a bias in ratings, he doesn't believe it is done with dishonorable intentions.

"I don't think it is deliberate bias [on the part of managers] ... . It just means that different executives are looking for different things."

Sharon Armstrong, president of her eponymous Washington-based HR training and consulting organization and author of Stress-Free Performance Appraisals, thinks the study highlights the need for companies to increase training in the area of employee appraisals in order to make them more objective.

But, she acknowledges, "It's not a totally objective process.

"I am a big proponent for training for appraisals, both for employee and manager," she says, adding that proper training and the establishment of concrete targets can reduce the amount of bias that finds its way into a performance review.

"Biased evaluations can lead us into a lot of trouble, like discrimination lawsuits and defamation of character suits, if we are putting too much subjectivity into appraisals," she says.

Armstrong suggests four steps to make managers' appraisals of their employees more effective and less subjective. "First, [managers] need to maintain accurate, well-documented written records about employee performance," throughout the year, she says, noting that some managers tend to reduce their focus on an employee once his or her annual performance reviews has been completed.

Managers must also "base their evaluations on specific, objective job-related behavior only" and not focus as much on personality traits of the employee. Also, Armstrong says to "make sure performance expectations are clearly communicated [to employees] and that the standards are valid and fair."

Finally, managers need "to really be sensitive to 'rating errors' or factors which mislead or blind us when we're in the appraisal process," she says. Anything that distorts reality favorably or unfavorably in the employee's appraisal is something to be avoided, she says.

The key to employee evaluations, she says, is that "the performance appraisal is the culmination of all the many discussions that you have with an employee throughout the entire evaluation period, so there are really no surprises" when the appraisal is made.

When setting goals for the coming year for employees, Armstrong takes a variation on the SMART goals acronym of Specific, Measurable, Attainable, Relevant, and Time-based, to which she adds Engaging and Reinforcing.

"This goal-setting take place at the beginning of the cycle. Managers need to sit down with employees and say: 'We're going to sit down and talk about it.' And then you write it out in a very clear way and talk about what it would take to exceed it."

"Unless you're all on the same page, you're going to have reviews all over the board," she says.

While Armstrong thinks the PDI research shows that the thought processes behind employee appraisals need to be improved, Rockville, Md.-based HR consultant Mike Strand says it only adds to his belief that the entire appraisal process should be scrapped.

"[Appraisals] are inherently inaccurate because they are done by human beings, who all make mistakes," he says.

Strand cites the Lake Wobegon Effect, a reference to radio personality Garrison Kellior's fictional home where "all the children are above average" as one of the main problems of appraisals. Every boss wants to believe his or her employees are above average, so when it comes time to evaluate them, the temptation is there to inflate their performance over and above what is quantifiable.

Strand also believes that appraisals are "a lousy substitute" for two-way, employee/manager feedback and regular supervision.

"A performance appraisal is not something I'd do to someone I care about," he says. "Just imagine doing it to your children. It's not right."


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June 19, 2007

Copyright 2007© LRP Publications