Performance Reviews: How They Go Wrong

One view on how to do good performance reviews: The foundation of your performance evaluation system is the job description you wrote for each of your employees. A supervisor need only compare an employee’s performance against standards you identified in a job description to discover whether an employee does a job competently.

Your evaluation process is as simple as that. Or is it? Your job descriptions might be the best ones around. But they don’t guarantee good performance evaluations.

Why? More often than not, it’s the supervisors who gum up the process by inadequately comparing an employee’s performance against well-defined job standards.

Here are four major problems with evaluations conducted by supervisors:

1. Being Too Lenient. No one — not even supervisors — likes to point out faults to other people. In fact, the opposite is true. Rather than cracking down on an employee’s problems, supervisors gloss over them and inflate the value of the employee’s performance.

The problem is further complicated when pay raises are linked to evaluations. Rather than justifying a pay raise because of an exemplary performance review, supervisors inflate an evaluation to justify what they and employees alike see as automatic, obligatory pay raises.

You know your supervisors give lenient evaluations when, on a scale of one to five, the average score for all employees is four and climbing.

2. The “Halo” Effect. This problem pops up when your supervisor first singles out one outstanding feature of an employee’s work. The halo results when the bright lights of this outstanding attribute blind the supervisor to the employee’s faults.

Example: Mark is the best salesperson in the clothing department. This fact blinds Mark’s supervisor to his consistent problem of accepting checks without asking for proper identification.

3. The “Storm cloud” Effect. The opposite of the halo effect. It happens when a supervisor, because of one problem, allows a gray cloud of doubt and suspicion to settle over an entire performance evaluation.

Example: Carla is the highest-tipped waitress at the restaurant. Customers always comment about her friendly, pleasant manner. But during her evaluation, Carla’s supervisor can only comment about Carla’s low wine and dessert sales.

4. Spotlight Only on Today. An employee’s performance changes from day to day, week to week, month to month. But during evaluations, supervisors too often focus attention on what an employee did today and yesterday, and ignore completely the employee’s consistent failings in the previous five months.

Example: During Emmanuel’s evaluation, nothing is said about absenteeism. Only when he misses work the next week does his supervisor recall that during the first part of the year, Emmanuel had the highest absenteeism rate in the department.

How do you insure that supervisors avoid these performance appraisal pitfalls? How do you make certain they objectively evaluate employees’ performances?

Option 1

Educate supervisors about these problems. Bring supervisors together at a workshop designed to trouble-shoot performance appraisal mistakes.

Explain to them the problems of Leniency, “Halo” effect, “Storm cloud” effect, Spotlight on Today.

During this workshop, schedule time for hands-on experience, drafting well-prepared evaluations.

Read to them scenarios of employee Joe’s and employee Jane’s performances over the last 12 months. Include the good and the not so good, and the bad items a supervisor might typically note and put in an employee’s personnel file. Have supervisors prepare evaluations based on these scenarios.

Your work isn’t finished after this training is over. Studies reveal that rating accuracy improves immediately after these sessions. But evidence suggests that long-term effects are scarcely noticeable.

Therefore, make these workshops a regular part of your operation… not just a unique educational forum that will never again be repeated.

Option 2

Don’t do formal, written performance reviews. Some HR professionals believe that no matter how often and how well supervisors are trained, a few will screw up and produce written appraisals that can become smoking guns when disgruntled employees sue an employer for wrongful discharge.

A typical situation: The supervisor gives employee Doldrum an excellent written review every year for the past five years, even though Doldrum’s job performance has always been below par. The supervisor simply was afraid to tell Doldrum the truth. In the sixth year the supervisor finally has had enough of Doldrum’s poor performance and fires him. Doldrum, who is 59 years old, files an age discrimination case and argues that the real reason he was fired was because of his age. And his proof is the five-year history of excellent performance reviews.

Instead of doing formal, written performance appraisals, train supervisors to give ongoing coaching to employees. Bring poor performance to an employee’s attention immediately. Coach the employee on doing the job well. Praise the employee when he or she does outstanding work. Don’t wait to cover all this in an annual review.

Option 3

Make doing performance reviews easier for supervisors by having them use computer software. A standard software program used by all supervisors can increase the quality of appraisals and give more consistency to their evaluations.

Important: Make sure you do your homework. Periodically review written evaluation forms prepared by supervisors. On that scale of one to five, is the average rating nestled too close to five? That’s a sure sign that something is wrong.

Also, separate annual performance reviews from pay and salary reviews. Take out of the timing of performance reviews the financial incentives to avoid the truth or stretch the truth. When pay and salary raises are tied to the results of the performance reviews supervisors feel under pressure to give good reviews (when they’re not warranted) so that the employees involved can get their raises. How well a person has done his or her job in the previous 12 months is only one of several factors that should go into decisions about pay increases. Establish different schedules for pay raises and evaluations.


One Company’s View on Reviews

Like a lot of standard business practices, performance reviews seem designed to encourage mediocrity and the status quo. They are confrontational. And they are rote. Employees and employers alike approach these reviews with distaste.

At Boardroom, Inc. we find that cooperation is always better than confrontation. Why, then, do many businesses persist in this empty exercise that pits the authority — the boss, the expert, the supervisor — against the next down the line — the accused, the examined, the subordinate?

Twice a year our managers at Boardroom go over job descriptions of individuals in their departments. They fine-tune the specifications, since jobs are continually changing. They then give the revised descriptions to the individuals working in the jobs described. They ask the employees to make changes in the descriptions. Together, they also work out a ranking of the elements of the job, in descending order of importance.

The next step is the most important… We ask the employees to rank themselves.

This puts the performance review on a whole other footing from the confrontational mode of conventional business practice. It brings employees into the process from the beginning, encouraging them to review in their own minds how they could do their jobs better instead of preparing to defend how they perform now.

Managers go over these self-reviews, noting differences in how employees rate themselves and how the manager would rate them. Then the manager and the person being evaluated sit down to discuss these differences.

This is rarely a difficult conversation. The focus is always on ways to achieve personal growth through more effective work.

– Quoted from the book

“I Power: The Secrets of Great Business in Bad Times,”

by Martin Edelston and Marion Buhagiar.

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