At review time, do you under- or overrate employees?

By: Katie Loehrke

Publication: Employee Relations Management Today

Date Posted: 07/17/2018

Overrating employees

Why it happens: Statistically speaking, consistently rating all employees at average or above doesn’t make sense, yet rating individuals below average can seem severe, and supervisors may worry that it will have a demotivating effect.

Delivering less-than-positive feedback can also be uncomfortable, leading some supervisors to minimize or even refrain from addressing performance issues, hoping they can coach an employee out of them without formally documenting the problems.

For some workers, a ranking of “meets expectations” is still a blow to the ego (who wants to be average?). In this sense, it can be tempting to overrate employees even when no major performance issues exist.

Some supervisors may also overrate employees to motivate them, hoping individuals will rise to the rating.

Overrating also happens when supervisors aren’t familiar enough with individual performance. In such situations, they may have little choice but to assume employees are performing to a satisfactory level.

The consequences: Employees who are overrated may be happy with their reviews, but they may also feel entitled to promotions, larger raises, and more responsibility — which they may not actually be ready for.

In the worst-case scenarios, an overly generous rating can give an employee a superiority complex or make him or her complacent. It could also undermine discipline or termination down the road if the rating is not consistent with the reason for an adverse employment action.

Underrating employees

Why it happens: Underrating employees can happen for any number of reasons. For instance, you might not realize you’re comparing an employee to a standout performer rather than to the expectations for the position. You might also rate employees with more tenure more harshly because you expect more from them, or you might let your personal feelings about an employee cloud your view of their accomplishments.

Recency bias is another way employees could be under- (or over-) rated. Employees sometimes kick it up a notch right before their annual reviews will be written. When this happens, the ease with which supervisors can remember the recent past can cause them to overrate employees in an annual review.

In the reverse, a recent lack of stellar performance can also overshadow what may have otherwise been a solid year.

Employee performance must be compared to consistent and established expectations for the job in question. Be sure you’re not moving the bar or failing to see the whole performance picture.

The consequences: Moving the bar on employees or failing to notice contributions over the entire review period is a surefire way to demotivate workers.

The most resilient employees may respond to an unfairly low rating by working harder to ensure you notice their contributions going forward. But other workers may find it more difficult to believe that discretionary effort will be recognized. Those workers may instead respond by becoming disengaged.

Help yourself with regular performance conversations

One of the most widely criticized tenets of typical performance management is that it’s a once-per-year conversation. Forty-eight percent of workers report having performance evaluations annually, but 26 percent have them even less frequently, according to Gallup.

Even if you have formal reviews only annually, talking about performance and development regularly is one of the best ways to help yourself avoid under- or overrating employees. More consistent feedback on performance will make it easier for you to ensure you’re representing the whole of employee performance.

If you’re using regular conversations throughout the year to coach employees along the way, it’s even possible that you can help employees correct minor issues before they become concerning enough to include on an annual review. On the other hand, when an employee doesn’t correct issues throughout the year, it should come as no surprise to him or her that when the item appears (now more formally documented) on his or her annual review.