Performance appraisals can help small businesses improve their overall performance, motivate employees, and ensure that everyone is working towards the same goals.

The term performance appraisal refers to the regular review of an employees job performance and overall contribution to a company. Also known as an annual review, performance review or evaluation, or employee appraisal, a performance appraisal evaluates an employees skills, achievements, and growth, or lack thereof.

Companies use performance appraisals to give employees big-picture feedback on their work and to justify pay increases and bonuses, as well as termination decisions. They can be conducted at any given time but tend to be annual, semiannual, or quarterly. Read the article below: Overcoming 5 Common Performance Appraisal Biases One of the most difficult aspects in the performance appraisal process has to do with biases. A bias is defined as a prejudice in favor of or against someone or something. It should go without saying that employees expect their performance evaluations to be fair and free of biases. you are here: home / career development / overcoming 5 common performance appraisal biases 55 | August 13, 2013

Overcoming 5 Common Performance Appraisal Biases One of the most difficult aspects in the performance appraisal process has to do with biases. A bias is defined as a prejudice in favor of or against someone or something. It should go without saying that employees expect their performance evaluations to be fair and free of biases.

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Many different kinds of bias can show up during the performance appraisal process. Here are five common ones:

Contrast This occurs when the manager compares an employees performance to other employees instead of the company standard. When employees are ranked in comparison, someone must end up at the bottom, even if they are exceeding the company standard. The problem isnt the employee its the goal or standard that has been set. Halo An employee is rated highly in all areas because of one thing they do really well. Ive seen this happen with sales people. She hits the numbers and senior leadership loves it. But behind the scenes, she creates havoc and doesnt have the respect of her co-workers. Horn On the flip side, an employee is rated as a poor performer because of one thing they dont do well. For example, the administrative assistant who is great at everything but filing. It piles up because he puts it off resulting in the company hiring a temp to get the filing caught up. In all other areas, hes a rock star. Leniency A manager gives everyone on their team a satisfactory rating. Unfortunately, Ive seen this occur a lot when a manager has a large span of control coupled with a common review date. The manager has dozens of reviews to work on and a heart full of good intentions. But somewhere around review number 17, the manager gets burned out and starts giving everyone a satisfactory response. Because it doesnt require any written supporting statements. Recency The employees most recent behavior becomes the primary focus of the review. This can go both ways. A poor performer does something terrific and their past performance is forgotten. Or an excellent performer makes a mistake and it weighs down the rest of the review. If youre looking for some resources to help managers better understand these biases, I found a good book during the SHRM Annual Conference. The First-Time Managers Guide to Performance Appraisals by Diane Arthur goes into biases and much more. This book would be very handy for organizations that dont need a full-blown performance appraisal training session maybe because the company has just a handful of managers who give appraisals or only a couple managers need a refresher.

Id also suggest pairing it with the book 2600 Phrases for Effective Performance Reviews by Paul Falcone. I know, I know, some people are anti-phrases books but for managers who are looking for creative inspiration when it comes to writing about employee performance, its helpful. Even for managers with solid writing skills, its not easy to find the right words when an employee needs to improve their performance.

One thing I found useful in the 2600 Phrases book were the phrases for meeting/exceeding expectations. As a HR pro, Ive often had to work with managers to make sure when an employees performance was being reflected as either meeting or exceeding expectations; it was truly expressed in the proper area. You know, meeting the standard isnt misinterpreted as exceeding the standard.

The more resources we provide to managers, the more comfortable they will get at discussing performance. This only benefits employees and the company. What did you find especially interesting or relevant in the article? Why? The biases outlined can lead to unfair and inaccurate evaluations of an employee's performance. How should a new business owner address these potential biases? Which of the biases do you think you would need to be especially aware of? Do you have any personal experience with any of the biases listed?