Problems with Performance Reviews

Performance reviews can be an exciting time for employees, in most cases. However, the process of completing performance reviews is an imperfect science. There are many problems which can cause a performance review to not go as expected for the employee. In most cases, performance reviews are directly tied to pay raises. This raises the question of what problems can occur during performance reviews and what are some possible solutions to rectifying those issues?

One issue that can occur is referred to as the ‘halo’ effect. This means that managers “allow the rating they give to one characteristic to excessively influence their ratings on all subsequent factors.” (Advisory, Conciliation and Arbitration Service, 2007) This is an area that I have never considered. I would like to believe that ratings on my performance appraisals have been genuine however; the ‘halo’ effect brings something to consider. A possible solution to this problem is to ensure that all areas of the appraisal are judged individually. It is important to focus on one area of the appraisal at a time before moving onto the next area.

A second problem that can influence a performance appraisal is what is referred to in the text as the Recency Effect. This means that “the final presentation has more influence than the first presentation.” (Plous, 1993, p.42). This, unfortunately, is very easy to do without year-long documentation of an employee’s performance. For example, if an employee is not performing satisfactorily at the beginning of the review period but, puts forth outstanding effort as the review draws near, the manager may only remember the last few months. This can be remedied by documenting performance throughout the year. Proper documentation will allow the manager to review the employee’s performance for the whole year, instead of just the last few months of the review period. The Recency Effect can also work against the employee, as well. If the employee has a shaky last few months as the review time draws near, the manager may only remember the trouble that has occurred most recently. This can negatively affect the employee’s performance review, thereby affecting the pay raise that comes with it.

A third problem which can affect an employee’s performance review is guilt on the part of the manager giving the appraisal. It can be difficult for managers to give negative ratings because they do not want to hurt the feelings of their employees. Managers have to understand that the criticism they are giving to the employees is