Common Mistakes Managers Make when Conducting Employee Reviews I

Annual employee reviews can be a great asset for a company, if done correctly.  Unfortunately, we are all human and are prone to make mistakes.  It happens!  Think of this module as a road map to show a few of the major pitfalls to watch out for, and avoid.  Avoiding these pitfalls can help your annual review be a smooth ride!

 Contrast Effect

We have all been affected on some level by the contrast effect, though we may not have known the term for it.  Contrast effect means using one employee’s standards to gauge another employee, instead of using the preset goals.   Your company sets reasonable goals and standards for its employees.  While one employee is able to produce at a faster rate, that doesn’t mean another is.  When conducting an annual review, you have to stick to the goals and guidelines set forth from your company.  For example, telling an employee they are getting a low score because they don’t answer as many calls per hour as Suzie, is not acceptable.   Telling an employee that the minimum standard of calls answered per hour is 15, and giving them a low score because their calls per hour is 8, is acceptable.  

Similar-to-me Effect

The next pitfall to watch out for is the similar-to-me effect.  The similar-to-me effect means showing favoritism to individuals who share the same background or similarities with you, the reviewer.  Favoritism and the workplace are never a good mix.  So what happens when there is favoritism in the workplace?

  • Respect for the supervisor is decreased.
  • Work satisfaction is decreased.
  • Camaraderie is decreased.
  • Co-workers resent favored employees.
  • Productivity is decreased.
  • Job turnover is increased.
  • Employee engagement is decreased.

Halo (or horn) Effect

Next we will learn about the halo (or horn) effect.  The halo (or horn) effect means that a reviewer focuses only on a narrow set of goals to determine the overall rating, in an unfair manner.  In an annual review, the final overall rating is determined by the summation of all of the categories.  An annual review would cover all aspects of an employee’s job.  With the halo (or horn) effect, the reviewer bases the overall score because on one or a few of the categories in the annual review. The score should be determined by the whole review, not just some of the sections.  An example of this would be if a reviewer gave an employee a poor evaluation score because of not scoring high in one category.  The employee scored high, and even exceled in all other categories, but ended up with a low overall score.  

Central Tendency

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Central tendency is another pitfall to watch out for.  Central tendency means taking the average of the entire score for everyone within the team and assigning to each individual on the team, irrespective of their accomplishments during the specified period.  As we discussed before, teamwork is important in any company.  Teamwork doesn’t mean that the individual’s accomplishments and attributes are not valid.  Just because the team collectively does a good job, doesn’t mean all of the individuals involved in the team did, and vice versa.

Case Study 

Stella is a very hard working employee.  She does her best, and looks forward to her annual reviews.  She knows that her annual review is her chance to see what she excels at and what she needs to work on.  Oliver works on the same team as Stella.  He is a subpar worker, and seems to skate by.  Most of the time, the other team members end up having to do some or all of his job for him.  He usually makes decent scores on his evaluations, the team thinks that is because he and his boss were on a high school basketball team together. This year, their boss has decided not to have individual evaluations.  He decided that he would just evaluate the group as a whole.  The team has a big issue with this decision.  They feel like Oliver shouldn’t make a good score on his evaluation, and they feel like their efforts are being undervalued.