- Bias in performance reviews. Twenty-five percent of respondents to a recent Syndio survey disclosed their performance reviews were negatively affected by their supervisor's personal biases.
- Flaws in the system. While many organizations may strive to link pay and performance, there may be program flaws and biases that limit the ability to truly pay and promote based on performance.
- Manager training. Managers should be challenged to consider whether their performance-review feedback would be the same if their employee had a different identity or other demographic information.
Are biased bosses affecting your organization’s performance review process?
One quarter of respondents to a recent survey disclosed their performance reviews were negatively affected by their supervisor's personal biases, according to a Syndio poll of over 1,000 full-time workers across all job levels in August 2023 that looked at the interplay of performance evaluations and growth opportunities.
"Leaders and managers are human beings, and bias creeps into their decision making,” said Katie Bardaro, labor economist and Syndio's chief customer officer. “To better combat that bias, companies need to pair training with data analytics to better understand what's driving and stopping people movement."
In order to do that, she said, leaders need to use data to empower changes within their organizations, from promoting more diverse talent to rooting out managers who cannot overcome their biases.
“This is another moment for HR leaders to seize the technological changes coming to their functions to drive meaningful change they know will create more diverse and better performing companies," Bardaro said.
Seeking a ‘Clear Link’
While many organizations may strive to link pay and performance, there may be program flaws and biases that limit the ability to truly pay and promote based on performance, said Lesli Jennings, North America leader, work, rewards & careers at WTW.
“In other words, there may not be a clear link between performance and pay for performance,” she said.
For example, annual performance reviews conducted by managers only at the end of the year may have some recency bias.
“Therefore, there could be manager bias in the performance review of only the most recent achievement of work completed rather than a holistic view of the year,” Jennings said.
Bias can also present itself when the manager — who is typically responsible for determining the performance rating — doesn’t have the full picture of performance of the individual being assessed.
“Without feedback or input from others who work with the individual in a meaningful way to provide relevant feedback,” Jennings said, “the rating relies solely on one person’s point of view.”
X-Rays and Compasses
If such biases exist within an organization, Bardaro said, it’s impacting more than an annual raise or bonus payout.
“It can have lasting detrimental effects on the employee’s lifetime earnings, and — unfortunately — be an unintended vehicle for perpetuating systemic racial and gender pay gaps at an organization,” she said.
It’s therefore “absolutely crucial” to pair things like anti-bias training with data analytics to better understand what’s driving and potentially limiting employee movement within a company, Bardaro said.
“When armed with data, people leaders can not only course correct as needed, but measure their progress over time,” she said. “It's like giving leaders a pair of X-ray glasses to see through walls biases have built, and ensure evaluations are based on objective measures of success, not misconceptions.”
Meanwhile, when it comes to de-biasing the performance-review process, using data analytics is like “recalibrating a compass to find true north,” said Bardaro.
“By utilizing objective metrics proactively, organizations can mitigate the impact of subjective judgment,” she said.
Action Items
Acknowledging that the status-quo process could be harming rather than helping your organization is a crucial first step toward success, said Bardaro.
The next step is to leverage data-driven insights and analytics to get a bird’s-eye view of what’s happening at the company, and uncover underlying issues and biases the current process may be enabling.
“CHROs and HR leaders can use insights to facilitate conversations with decision makers on how to revamp evaluation processes in a way that best supports their employees and organizations goals,” Bardaro said.
Syndio’s survey also found that more frequent check-ins, done two or more times a year, can reduce concerns about supervisor bias and bring clarity to advancement opportunities.
Of those surveyed, 38% of companies have shifted to more frequent reviews, with technology companies leading the way at 52%.
Clear definitions of performance and documentation are also critical and help drive consistency and limit presence of bias, said Jennings.
“Ensure managers are accurately documenting performance review outcomes, and the technology is supporting the documentation of goal achievement, competency reviews, feedback and employee self-assessments,” she said.
When making assessments about an individual’s performance, leaders should be challenged to consider whether their feedback would be the same if their employee had a different identity or other demographic information, said Justin Sun, a compensation expert at Expedia Group.
“Performance assessments should ensure that the highest ratings are not skewed towards those who fall into a majority group compared to those who are female or in an underrepresented minority group,” he said.
Leaders also should be reminded to slow down when making performance assessments, because bias — or making mental shortcuts about an individual — happens when leaders are trying to rush through assessing multiple employees on their team, Sun said.
But the most important aspect of ensuring that leaders demonstrate the behaviors that you’re asking of them is to ensure that these are being “role modeled” at the executive level of the organization, he said.
“It’s hard to know what a great performance feedback conversation looks like, for example, unless you’ve experienced one yourself.”
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