7 Sources of Performance Review Bias and How to Fix Them

Even after developing the best HR performance management system for your organization, you'll still have to deal with performance review bias.

Objectivity is the key to a good appraisal system, but it is not always easy to attain. Performance data is created by people, and people's opinions can be biased in a number of ways. In the article below, you'll find out why most performance evaluations are biased, and how to fix them.

What Is Performance Review Bias?

Rater biases can come about consciously or unconsciously. They are tendencies that affect how managers rate their employees unrelated to actual performance, they are also called "Idiosyncratic Rater Effects." Here are some of the more common examples:

• Averaging ratings closer to the middle because "no one is perfect"
• Over-prioritizing a particular skill that we value highly in ourselves
• Rating for potential instead of performance
• Focusing too much on recent events
• Overvaluing people who remind us of ourselves

Ideally, accurate ratings are based 100% on an employee’s performance. Yet when a person’s unconscious bias is applied to performance appraisals, it can lead to inaccuracy, favoritism and even unfair treatment of employees.

Studies have also shown that when employees perceived performance ratings to be affected by rater bias, they expressed reduced job satisfaction further leading to greater intentions of quitting their jobs. Thankfully, there are ways to address rater bias and optimize your performance appraisal process.

Types of Bias in Performance Appraisal

Bias in performance reviews can unfairly affect your employees’ careers trajectory. It can also cause managers to unconsciously set less ambitious goals for some employees. Worst of all, biases can skew who is offered development opportunities.

Solving this problem starts with understanding of the different types of bias in performance appraisal.

1. Halo Bias

This is the tendency to give overall favorable ratings due to strong performance in only one or two areas. Its opposite, the Horns Bias, is the tendency to give overall unfavorable ratings due to poor performance in only one or two areas. An example that would fall into this category would be an employee who always shows up early to work, even if the employee performs average overall, this one easy to see thing could greatly increase their overall rating.

What you can do: In this case, basing an employee’s performance on only one perspective allows the bias to take effect. A 360 degree perspective gathered from multiple sources, such as managers, colleagues and reports, would provide more accurate results. This idea is often referred to as crowdsourcing, and it can help to factor bias out of the equation.

2. Recency Bias‍

Recency bias is likely the most common type of performance review bias happening in your organization. It happens when the employee’s most recent performance level skews the opinion of the total work for the cycle being evaluated. This could happen both ways; they performed well for the entire period but made a terrible mistake before appraisal time, or they performed poorly until a recent accomplishment just before appraisal time.

3. Spillover Bias

Spillover bias is a when a manager continues to provide positive or negative ratings for an employee based on the employee’s performance in previous cycles. The rater seems to be stuck in a mode of thinking which might be attributed to a case of forgetfulness. However, this type of bias has the potential to lead an employee to be over or under valued for their work.

What you can do: When trying to address recency and spillover bias, it is important to increase familiarity with the employees over longer periods of time. Some companies like Adobe are replacing annual reviews with quarterly performance discussions. A version of this continued conversation throughout the year gives managers the opportunity to keep up to date with employee performance and progress which brings to light what skills and strengths are being developed, as well as areas that need improvement. Work on a system that allows the attachment of files and notes so employees can be sure that their actual accomplishments are being considered when managers complete their appraisal.

4. Leniency and Severity Bias

These two biases show up when managers tend to rate higher or lower on average than their peers. This is often attributed to a manager's personality, culture or perspective on management. Since ratings are meant to be compared across the company, this bias will make your comparisons inaccurate.

5. Affinity and Alienation Bias‍

If your organization struggles with affinity bias, it means the rater gives higher ratings to those employees with whom they believe they have more in common. Alienation bias is the tendency to give lower ratings to those with whom the manager believes they have less in common. Affinity alienation biased evaluation examples include situations where the rater and employee both grew up in the same town, have a similar heritage, or favorite sports team.

6. Identity Bias

This bias is the tendency to view and rate employee performance filtered through stereotypical assumptions about sex, race, sexual orientation, ethnicity, religion, political affiliation, socioeconomic status, educational background, age, disability, etc.

7. Comparative Bias

Comparative bias rates an employee in comparison to another one, or groups of others, instead of evaluating them based on their ability to meet the defined performance expectations.

What you can do: When dealing with these types of behavioral bias, it is important to focus on definitive behaviors as well as measurable goals or achievements. Ratings often cover subjective metrics, but rather than asking if one answers the phone promptly/courteously, you might ask if one answers the phone within five rings or with a specific greeting. Having descriptors for the rating scale can also guide a manager to choose the proper rating and put away the bias.

Ratings are important because ratings equal data, and companies love data. You can decide to pursue good data by removing all bias, but another option is to just not collect or trust quantitative data in certain situations.

There isn’t a perfect way to eliminate every single bias, because in the end, people are the ones rating, and people are biased. So focus on helping people generate the best performance data possible, and back it up with more subjective and long form questions as well.

How Can You Reduce Performance Review Bias?

If you want to eliminate biases from performance reviews and appraisals, you have to infuse certain strategies into the review process that increase the chances that every employee will be reviewed fairly every step of the way. When the strategies you use stamp out bias, everything from setting new goals to the professional development opportunities that follow are unbiased too.

Here are three ways you can modify your performance reviews so bias doesn’t sneak into the process.

1. Ensure Your Review Forms Are Objective

How you structure your review forms, the questions you ask and the expectations around answers can impact how much bias gets into reviews.

For example, one law firm discovered bias in performance reviews because questions were left too open-ended, and managers were not required to justify their ratings. This was causing troubling correlations between certain groups of employees and poor reviews despite lack of any clear justification.

They developed a new approach that focused manager feedback on what the organization determined really mattered and forced clearer justification of ratings. This included things like concrete evidence being shared in feedback.

Make sure your review forms and accompanying documents provide clear explanations of how they should be filled out and what acceptable examples of feedback are. Focus feedback on outcomes or concrete examples of living up to competencies or cultural values. “Seeing something” in an employee should never be enough to justify a strong review.

2. Gather Multiple Sources of Feedback

An employee’s performance will almost always impact more than the direct manager who is conducting the review, and yet, in many organizations, it’s only the manager who provides input. Having only one person provide feedback greatly increases the chances of bias having an outsized impact on the review process.

HR departments can mitigate performance review bias by gathering multiple sources of feedback when reviews come around. At a minimum that should include a self-review where the employee is given an opportunity to advocate for themselves.

If an employee lays out a clear, evidenced case for the quality of their work over the period and their manager submits a poor review with some lazy explanation that includes lines like “leadership potential” you’re well on your way to uncovering bias. 

Peer, upward and external feedback can also uncover additional points of view for a more holistic perspective on the employee’s contributions.

When looking at multiple sources of feedback it’s just as important to consider the feedback as the differences in feedback between different sources.

3. Provide Employee Training

Employee’s biases won’t go away, but training can help.

The two types of training you should pursue are first how to recognize bias and second how to provide feedback that is less likely to be clouded by bias.

Bias training will start to put names to common biases and show examples that your employees can look for in their own experience. Just recognizing bias is often enough to diffuse it. All of your employees want to be recognizing and working with the best talent, bias training can help them get there.

The other useful type of training is feedback training. Well constructed feedback is already largely immune to performance review bias. For example quality feedback will be based on specific actions and outcomes and will be given with the goal of helping an employee improve and develop. We’ve written extensively about quality feedback if you’d like to learn more.

Bias is already in your organization, but if you can spark unbiased feedback with effective forms, get a more holistic view with multiple sources of feedback and train your employees to recognize and avoid their own biases, you’ll be well on your way to mitigating the effects of bias on your people.