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5 Tips to Conducting Sound Performance Reviews

HR Insights

Posted on 8/8/2018 by Ali Oromchian, Esq.
Performance reviews are essential to the development and growth of your staff. Performance reviews facilitate open door communication that align expectations, give positive reinforcement, and provide constructive feedback for improvement. However, when conducted incorrectly, performance reviews present a number of challenges and legal risks.

One common error is that managers and business owners often treat performance reviews as an obligation to be conducted throughout various milestones in an employee’s lifecycle—and the misconception that a performance review leads to a raise. These common misconceptions result in vague reviews that only evaluate personal views of an employee, which can easily turn into biases. Biases are expressly prohibited and are the leading cause of discrimination claims.

Strong performance reviews entail feedback to improve substandard aspects of an employee’s performance. This criticism can be uncomfortable for both the evaluator and the employee. Constructive criticism could invoke feelings that your employees are not prepared to deal with. For example, your staff may not be receptive to your feedback, may feel attacked, and even blindsided. This could result in animosity, feeling singled out, and in escalated situations, this could eventually lead to lawsuits.

Below are some pitfalls to avoid when conducting performance reviews:

1. Evaluating attitude, not performance. A performance review is an objective review of an employee’s performance. This means the evaluation of performance should be specific, objective and measurable. Vague statements that attack an employee's demeanor could be interpreted as some kind of illegal age, race, gender or disability discrimination. Instead, supervisors should use concrete, job-based examples to illustrate any criticism such as communication or interpersonal skills.

For this reason, the word "attitude" should never appear in a review. Employment lawyers and courts often see that as a code word for discrimination. Instead, if there are incidents of “bad attitude” or unprofessional actions, this should be addressed in interpersonal skills or communication sections that reference specific incidents. Additionally, some good alternatives instead of attitude are insubordination or professionalism.

2. Giving too much weight to one aspect of performance. Many times an evaluator may be influenced by personal views of an employee. Below are the two instances where this can occur.

• Halo Effect: is a form of cognitive bias that causes one's perception of another to be unduly influenced by a single positive trait. This means rating an employee more favorably based on positive perceptions you have of an employee. This could be based on personality, likability, appearance, etc. For example, you might not be as critical of a staff member who makes clerical errors because they are soft spoken and nice—you know they aren’t doing it on purpose is the Halo Effect.

• Horn Effect: is a form of cognitive bias that causes one's perception of another to be unduly influenced by a single negative trait. This means rating an employee less favorably based on negative perceptions you have of an employee. This could be based on a personality, likability, appearance, etc. For example, you might be more critical of a staff member who makes clerical errors because they have a history of being tardy— their unrelated poor attendance is affecting your perception of other areas of performance is the Horn Effect.

3. Fear of confronting employees. As we mentioned earlier, performance reviews are difficult—especially with a person who becomes defensive. The reality is that as a business owner/manager, performance reviews are imperative. One good tip is to frame the performance review. That would mean prefacing that all performance reviews are a business necessity, objective in nature, and exercised in good faith towards employees’ success. Additionally, it is important to remember that you must also highlight areas of excellence and great performance to ensure reviews are impartial.

4. Evaluation inflation. The reality is that performance reviews are difficult. As a result, managers often inflate evaluations by rating mediocre employees as proficient, average employees as exceptional, and above-average employees as superior. This then contradicts problems when an employee is fired for poor performance, yet their history of reviews tells a different story. The employee can then make the argument that the true reason for termination was wrongful or discriminatory. If there is an issue, it should be referenced in the performance review so you have tangible documentation supporting future termination or further discipline.

5. Inflating the rating scale. Most performance reviews include numbers or words to assess a scale of where your staff falls. Similar to evaluation inflation, being too lenient on these scales could misrepresent the seriousness of issues that are of concern. A good tip is to always add notes and performance improvement plans to clarify questionable ratings or below average ratings.

A performance review should be an objective review of specific aspects of an employee’s performance. Once you are self-aware of potential biases, you will be on the road towards sound performance reviews. Additionally, performance reviews should always be an opportunity to document shortcomings— this not only makes your staff aware of issues, but also helps to thwart wrongful/discriminatory claims. By recognizing evaluator driven errors and pitfalls, you can conduct more accurate performance reviews while protecting yourself from legal claims down the road.

For assistance conducting a performance review, reach out to HR for Health by calling 877.779.4747 Option 1 or email today!

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