Decreasing the Gap Between Managers’ and Employees’ Performance Ratings

Beth Miller |

Have you recently delivered a performance review to an employee who was surprised at your feedback? And in turn you were surprised at their reaction?

Mind the Gap, reports that on average managers rate their employees performance and contribution by almost a half point less than employees self-ratings.

There are five known biases that attribute to rating discrepancies between managers and employees

  • Two Self-rater biases: the need for self-esteem and the lack of self-awareness
  • Three Manager biases: lack of awareness of an employee’s contributions, justification of their role as a manager,  and budget justifications relating to pay increases

So if the gap is widening, what steps can be taken to decrease the effect of these biases and narrow the gap in performance ratings?

I would suggest that increasing an employee’s self awareness and increasing a manager’s awareness of employee contributions are two biases that can be decreased.

Decreasing Bias in Performance Reviews
Let’s start with the employee. Self-awareness can be improved through assessment tools such as Myers Briggs, 360º degree feedback, etc. Assessment tools should be used in conjunction with coaching.  It is important that employees have their assessments explained in detail to them so they can relate the results back to their workplace and position within the organization. Learning for the assessments is critical to actually increasing self-awareness. Results of the assessment as they relate to changes in performance should be reviewed on an ongoing basis.

On the management side of the equation, increasing the awareness of employees’ contributions can be addressed by:

  • incorporating a team review into performance reviews.
  • performance goals should be jointly developed with the employee
  • separate performance reviews from salary reviews

Team Reviews
When I ran a consulting company, we instituted a team review process. Because the consultants often worked on multiple engagements for multiple leaders, it was a necessary step to get a true sense of an employee’s contributions. Your company may not have this specific organizational dynamic but there are other employees who interact with the employee being reviewed whether it be a cross functional project, or department team members as a manager it is imperative to get a wide input on an employee’s performance.

Goal Collaboration
When putting together performance goals, the employee should be part of the process. Including the employee in the process provides both manager and employee to clearly define what constitutes specific levels of contributions and the employee’s ownership and commitment to the goals are strengthened.

Separate Performance and Pay
When performance and salary reviews are linked together something interesting happens, the employee forgets all the feedback and only remembers how much money she will be making in the future. So of course an employee is going to rate themselves higher in performance than the manager, their pay increase depends on it!

Many companies have moved to a process of performance reviews done more than once a year and the salary review is completed outside of any performance review.Multiple reviews provide consistent feedback and the opportunity for the employee to make adjustments to their contributions.

In short, providing employees with assessment tools to elevate their self awareness and incorporating team reviews, goal collaboration, and separating performance and salary reviews will help to narrow the performance gap ratings. Ultimately if these gaps are closed or narrowed, your employees will be happier and more engaged in their work. And as a manager, you will have more time to manage and lead.

Image Credit: The Stock Exchange (www.sxc.hu) User: ilco

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Beth Miller

Beth Miller

Beth Armknecht Miller’s passion for learning, and dedication to helping others, are strands woven throughout her distinguished career, which continue to guide her work with Executive Velocity, a top talent and leadership development advisory firm. As a trusted executive consultant, Vistage Chair, and committed volunteer, Beth holds herself to a rigorous standard of excellence, and she encourages her clients to do the same when pursuing their goals.

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