The Problem with Performance Review Bias is Systemic—Here’s What You Can Do About It

This article first appeared on Acorn Labs in March 2024.

For a more in-depth look at performance review bias, have a read of the full article.

Performance review bias is unfair or subjective judgments of an individual’s job performance. It affects the accuracy of performance reviews, leading to unfair outcomes and irrelevant development opportunities for employees.

There are multiple different types of bias:

• Recency bias
• “Similar to me” bias
• Leniency bias
• Severity bias
• The horn effect, or horns bias
• Halo bias
• Contrast bias
• Gender bias.

Why does performance review bias persist?

The fact is that employees feel performance reviews are impersonal, reduce them to a number, or focus too much on the past instead of future development. Performance reviews are also conducted with subjective assessments that open reviews to managers’ unconscious biases.

Managers aren’t to blame for performance review bias, though. Bias is a systemic issue brought about by the way traditional performance management is designed. Performance reviews are conducted with “open-ended” questions so that managers have a generic template to roll out organization-wide, which paves the way for biases to creep in. In other words, the performance review process isn’t designed in a way to discourage bias.

How to mitigate bias in performance reviews

There are five strategies you can implement in your organization to reduce bias:

Establish clear evaluation criteria

Set evaluation criteria for your performance goals. These are derived from business capabilities—i.e. the skills, behaviors, knowledge, processes, and tools that combine to deliver organizational outcomes. Your evaluation criteria will be whatever actions and behaviors enable employees to perform their required business capabilities and drive business impact.

Setting goals is just the first step—you need to lay out the steps to actually reach your objectives. In the case of capabilities, the best way to establish evaluation criteria is with competence, the leveled scale that measures capability performance.

Provide ongoing feedback

Once-a-year performance feedback is like slapping a plaster on a gaping wound—ineffective and not actually helping to heal the wound. But regular feedback throughout the year via coaching or regular check-ins is more likely to correct performance issues before they become a problem.

This means embedding learning within performance management and gives employees the chance to develop capabilities throughout the performance period rather than waiting until the annual review. This helps to reduce horns, halo, and recency bias as managers have a smaller performance period to talk about, and have specific evaluation criteria to answer.

Utilize different perspectives

Collect feedback from multiple different sources in performance evaluations like direct reports, peers, and clients. Diverse perspectives help in reducing bias and create more objective performance reviews.

This is also an opportunity to use different types of capability assessments:

• Self-assessments involve individuals assessing their own competence in their role-based capabilities.
• Manager assessments are performed by managers and revolve more around business and performance objectives.
• Subject matter expert assessments are carried out by subject matter experts, usually for specialist capability sets like executive positions.

Provide unconscious bias training

The main purpose of unconscious bias training is to reduce bias in behaviors and attitudes in the workplace, particularly in judgments based on race, gender, or sexual orientation. The training isn’t meant to just highlight where unconscious biases exist—it aims to teach participants how to manage their biases.

You can’t make unconscious bias training and one-time activity, though. Breaking down biases requires structural changes to operations and policies within the business, so organizations need to commit to long-term training to eliminate bias, otherwise training is just compliance.

Promote diversity and inclusion

DE&I is crucial for strengthening organizations’ workforces and culture by creating an equal-opportunity environment founded on meritocracy. Diverse workforces bring individuals together with varied backgrounds, experiences, and perspectives, which only enriches the evaluation process. Using multiple viewpoints in a performance evaluation reduces the prevalence of bias and ensures more objective ratings of employee performance.