The 3 Pitfalls of Performance Reviews-The Super Fantastic Leadership Show

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170: The 3 Pitfalls of Performance Reviews

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-We are talking about performance reviews and the 3 pitfalls that occur with them that every single leader should know! The biggest issue with any performance review is attempting to distinguish the signal from the noise. Was this performance due to luck or skill? This is no easy question to answer however, there are 3 things we need to know that can make this much easier to address.

Performance reviews; almost everyone hates them and we try to do our best to do them well. There is a reason that we don’t like them too. We all know that it is difficult to determine someone’s performance because there are so many influential factors. Well, there are the 3 things we are talking about on this week’s show that may surprise you.

Those three things are: Regression to the Mean, Outcome bias, and Sample Size. These three little things are what make PA’s so challenging. Understanding them makes a PA less challenging.                                                          

Also, here is a key concept: a performance review is NOT talent development.This gets confused very much and what they are for is for determining rewards and/or punishment. It will be up to the employee to take it as development or not.

How do I know if a leader creates a successful launch of a new product that it was because of them and their leadership or not just because the market was right or they got lucky? The truth: it was probably some combination of both. We have an outcome bias: outcomes are imperfectly related to employee effort and all the more reason we may want to emphasize process over outcomes.

For any given level of effort, a range of outcomes can occur due to factors beyond the employees control. We can have high effort and a less than ideal outcome or vice versa.

What have you found that makes doing reviews easier or more difficult?

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