This Month in I/O: Objective Performance Management

Subjectivity in Performance Appraisals

Posted by Thomas Carnahan, Ph.D on February 13 2023
Thomas Carnahan, Ph.D
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Subjectivity in Performance Appraisals

Performance appraisals require supervisors to rate their employees on a number of performance criteria. Sometimes this requires that the ratings be based on objective measurable results, however, oftentimes the ratings are based on the supervisors’ subjective opinions of the employee and their performance. For example, a supervisor could give someone a higher rating because they simply like the employee or because they don’t want to cause conflict by providing a low rating. Personal prejudices or unconscious biases can also negatively affect how an employee is rated.

Performance management systems are very helpful with determining individual, group, and organizational goals but it is imperative that the method for evaluating employees uses objective measures to reduce as much subjectivity and potential bias as possible. It is also important to keep in mind that starting pay decisions are the real deciding factor for how impactful raises and incentives are for star performers.

Making your Performance Management More Objective

  1. Basis – Ensure your performance management system is properly founded in an extensive study of the competencies, behaviors, and/or KSAs that are required for successful performance at the organization. Preparing a job analysis or competency modeling project with an appropriate subject matter expert helps to ensure that you evaluate this employment tool in a manner that is consistent with legal requirements.
  2. Process –Develop a process that considers the following approaches:
    1. Is open all year round – Performance should be documented throughout the year to ensure that salient moments are properly captured and are not dependent on the memory of the employee, manager, or stakeholder.
    2. Is open to more than just the supervisor and employee so that all interested parties can provide feedback to employees. Consider 270- and 360-degree performance processes to assist managers in providing a score that is related to the “whole” employee experience at the organization.
    3. Provides benchmarks or a “writing assistant” to help employees and managers properly document information that is related to the rating scale.
    4. Includes training for managers to understand common rating errors/biases on a regular basis, such as a few weeks before every performance cycle.
    5. Uses a process of “level-setting” where a neutral facilitator meets with managers to ensure appropriate discussions of rating behaviors, employee performance, and comparison is performed accurately.
  3. Results – Before performance review or merit increase discussions with employees, take a step back and review the overall picture for any concerns.
    1. Conduct an independent review of the score distribution by race and gender. This review should be prepared by overall organization and by meaningful grouping strategies such Function, Job Family, or chain-of-command.
    2. Identified disparity in performance management scores should be investigated to determine if appropriate documentation is in place to defend the scores or if non job-related interference is responsible for the perceived distribution of scores.
    3. Review and then consider changing scores that cannot be defended or seem to deviate from your company policies or practices.
    4. Undertake a pay equity analysis after the performance scores are finalized to confirm that any resulting compensation adjustments do not create any unexplained pay differences.

Additional recommendations include separating your performance management process into two separate processes that cover objectives (the what of the job) and behaviors (the how of the job) to ensure that both aspects of an employee’s experience are properly assessed and rewarded. Finally, consider alternatives to a pure “forced” distribution; for example, by ensuring that managers are trained to recognize and celebrate individuals who are fully successful in their role while also rewarding those that go above and beyond. A performance management rating distribution that looks like a “ski slope” provides no motivation for employees to improve.

Thomas Carnahan, Ph.D
Thomas Carnahan, Ph.D
Thomas Carnahan is Berkshire's Compensation Services Manager. He has a Ph.D in I/O Psychology from Capella University.

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