Performance Reviews

Psychological Biases: The bane of Performance Reviews

By on June 8, 2016

How would your employees react if they got to know their performance is not going to be reviewed? Pandemonium, right?  Performance reviews are essential for both the managers as well as the employees.

They provide an opportunity to have an insightful conversation. Managers get to know how their employees have performed throughout the month, quarter or year. They can reward and recognise consistent performers and appreciate their efforts. At the same time, they can initiate course correction measures for underperformers. With constructive feedback, employees can concentrate on improving their performance. Performance reviews serve as a documentation of good and bad performance of employees.

But what if performance reviews were biased?

Biased reviews would not only be ineffective, they would also lead to missed opportunities and poor decision making. Psychological biases tend to ignore common sense and clear judgement. Managers subconsciously form opinions about employees and review their performance accordingly. These reviews are subjective, not objective.


Some of the common psychological biases that affect creating fair and precise performance appraisals are as follows:

Confirmation Bias:

It is difficult to let go of preconceptions. People tend to look for information that supports their existing beliefs. They find it simpler to reject any data that goes against what they believe.

How to avoid?

Keep in mind while reviewing that everyone is markedly different from each other. Try to empathise with the other person rather than judging her from the word go.


First impressions are last impressions, is an incorrect statement that has led to a lot of poor decision making. While first impressions do have an impact, they should not be the sole criterion for judging performances. There could be other possibilities as well.

People tend to jump to conclusions without considering other important factors. An employee may have started off on the wrong foot, may appear a misfit in the organisation. That doesn’t mean he will always be the same. Eventually, he may have adapted well to the surrounding.

How to avoid?

Consciously try to stay away from creating first impressions. You never know, people with poor first impressions might end up surprising you with their performance.

Gambler’s fallacy

Don’t expect that past events will influence the future. If a previous target was achieved every time till that point, that does not mean it will always be so. The same target may be not be achieved the next time due to unforeseen circumstances. While it does reflect in his performance review, it may not be the employee’s fault.

In rainy season, it might not rain for 6 days in a row. That does not mean it won’t be rain on the 7th day. Better carry an umbrella and be prepared!

How to avoid?

Your decisions need to be based on thorough research. Study past trends but always consider all current factors.


An employee may have been exceptionally good in recent weeks but had a below expectation performance for the previous quarters. Similarly, he may have performed well at the beginning of the year. But for the last quarter, he may have been below average.

A short term recency analysis of an employee does not justify his performance throughout his duration. He should be reviewed in entirety for the complete period.

How to avoid?

Choose thorough research over convenience while evaluating performance. What’s obvious in the short term may not be so for the long term.

Halo effect

A single good quality does not outweigh all the bad qualities. Managers should be able to keep a holistic view while reviewing such employees. For example, they may be always smartly dressed to impress. But they always tend to procrastinate and avoid responsibilities.

Such employees only appear to be professional. Their inability to deliver quality work on time affects the organisation’s productivity. Don’t judge based on a single good quality.

How to avoid?

Identify inept employees at the initial stages. They need to be trained and developed to perform their roles efficiently  


An employee could be a steady performer throughout the year. His only bad habit could be that he always reaches late to office, despite repeated warnings. While he may face the penalty for such occasions, the manager’s perception towards him may change.

For one reason, his entire year’s efforts should not be overlooked. Don’t judge based on a single bad quality.

How to avoid?

People tend to slip and make mistakes. Instead of punishing them, the reasons for these mistakes should be identified and addressed.


Past performance of an employee cannot be used as a reference point. They may have performed poorly in the past. It is unfair to assume that they may repeat the same performance. With constructive feedback,  they can take efforts to improve their performance.

Don’t let past performance affect current assessment. These employees can be motivated to give their best every time and increase productivity.

How to avoid?

Concentrate on current performance. Past performance reviews should be used positively, only to compare and show employees how they have grown.


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