Benefits and Compensation

Performance Appraisals: The 10 Most Common Rating Errors

Most HR professionals look forward to conducting annual performance reviews about as much as a trip to the dentist, but as the economy improves, performance appraisals are going to be the key for talent retention, a positive work environment, and the overall growth and productivity of your organization.

That said, there are also pitfalls to avoid when conducting your performance reviews. In today’s Advisor, we’ll get tips from experts on how to make performance appraisals more meaningful for the company, the manager, and the employee.

In a BLR® webinar titled “Stress-Free Performance Appraisals: Increase Productivity, Engage Employees, and Retain Top Talent,” Sharon Armstrong outlined 10 rating errors to avoid.

Armstrong is a human resources consultant, trainer, and career counselor, in business since 1998 as Sharon Armstrong and Associates.

Could your comp program use a little fine tuning? Join us March 31 for an interactive webcast Pay Grades and Job Value: How to Correctly Assemble All the Pieces of the Compensation Puzzle. Learn More

10 Rating Errors to Avoid During Performance Reviews

Rating errors are factors that mislead or blind us in the appraisal process. Armstrong warned that “appraisers must be on guard against anything that distorts reality, either favorably or unfavorably.” These are the 10 rating errors seen most often. They’re where managers and other raters are most likely to go offtrack.

  1. Central tendency. Clustering everyone in the middle performance categories to avoid extremes of good or bad performance; it’s easy, but it’s wrong. This isn’t fair to employees who are really making an effort, and it can be demoralizing.
  2. Favoritism. Overlooking the flaws of favored or “nice” employees, especially those whom everyone likes.
  3. Grouping. Excusing below-standard performance because it is widespread; “Everyone does it.”
  4. Guilt by association. Rating someone on the basis of the company they keep, rather than on the work they do.
  5. The halo effect. Letting one positive work factor you like affect your overall assessment of performance.
  6. Holding a grudge. A dangerous luxury that may result in your ending up in court. Never try to make employees pay for past behavior.
  7. The horns effect. The opposite of the halo effect—letting one negative work factor or behavior you dislike color your opinion of other factors.
  8. Bias. Allowing your bias to influence the rating. Bias can come from attitudes and opinions about race, national origin, sex, religion, age, veterans’ status, disability, hair color, weight, height, intelligence, etc.
  9. Recency. Rating only recent performance, good or bad. Data should be representative of the entire review period. If you’re not keeping good notes, you may not remember the whole period. Armstrong noted that “you want to make sure, again, that you’re keeping records so that you can adequately describe performance over an entire performance period.”
  10. The sunflower effect. Rating everyone high, regardless of performance, to make yourself look good or to be able to give more compensation.

These and other rating errors can cause your entire performance review program to lose credibility among your employees. With consistent analysis of the program, you can work to avoid this situation!

Performance management and compensation—there’s always room for improvement.

Now is the time of year when companies typically start looking at pay ranges and contemplate re-ranking jobs, moving positions, reviewing internal equity, or adding variable pay systems into their total reward compensation mix.

Regardless of whether you want to reward performance, time, or knowledge, determining pay grades is the first step to an equitable, competitive compensation system.  But proper determination of pay grades is often overlooked as many companies focus instead on salary survey data. Even if you have great data, the wage won’t be right if you don’t first determine the job’s value to your organization.

How to be sure you are following best practices? Fortunately, there’s timely help in the form of BLR’s new March 31 webcast—Pay Grades and Job Value: How to Correctly Assemble All the Pieces of the Compensation Puzzle.  In just 90 minutes, you’ll learn everything you need to know about how to properly compensate the various jobs at your organization–and how to remedy any discrepancies you uncover.

Register today for this interactive webinar.

Comp program offtrack? Join us March 31 for Pay Grades and Job Value: How to Correctly Assemble All the Pieces of the Compensation Puzzle. Learn More

By participating in this interactive webcast, you’ll learn:

  • The laws that affect your compensation strategies, such as the Equal Pay Act
  • How a salary structure, such as a set of pay grades and ranges, is built
  • When to pay above market (and sometimes below)
  • The key ways that pay grades influence your performance/merit pay programs
  • How pay grades interact with variable pay, and why this connection matters
  • When and how to conduct an internal equity review
  • Strategies for addressing pay inequities while minimizing your legal liability
  • What to do if you discover pay discrepancies between genders ("gender inequity")
  • Which employers are required to comply with Executive Order 11246 — and why they should get ready for increased anti-pay-bias enforcement efforts from the EEOC
  • And much more!

Register now for this event risk-free.

Monday, March 31, 2014
1:30 p.m. to 3:00 p.m. (Eastern)
12:30 p.m. to 2:00 p.m. (Central)
11:30 p.m. to 1:00 p.m. (Mountain)
10:30 a.m. to 12:00 p.m. (Pacific)

Approved for Recertification Credit

This program has been approved for 1.5 recertification credit hours toward recertification through the Human Resource Certification Institute (HRCI).

Join us on March 31—you’ll get the in-depth Pay Grades and Job Value: How to Correctly Assemble All the Pieces of the Compensation Puzzle webcast AND you’ll get all of your particular questions answered by our experts.

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Train Your Entire Staff

As with all BLR®/HRHero® webcasts:

  • Train all the staff you can fit around a conference phone.
  • You can get your (and their) specific phoned-in or e-mailed questions answered in Q&A sessions that follow each segment of the presentation.

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