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These 4 Common Biases Are Screwing Up Your Performance Review

People often overestimate what they can accomplish, and overvalue what they’ve already accomplished.

These 4 Common Biases Are Screwing Up Your Performance Review
[Photo: Flickr user Hernán Piñera]

As the year winds down, companies start to gear up for year-end performance reviews. Whatever your opinion of their value, it isn’t uncommon for them to include an employee self-evaluation component. When they do, many people tend to rate their performance quite a bit higher than their peers.

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The question is why. Are most people’s egos inflated? Or are we just blind to our own weaknesses? There’s a science to self-perception, and it impacts our decision making at work. Here’s a look at four common biases that are probably getting in the way.

1. Self-Inflated Bias

People often overestimate what they can accomplish, and overvalue what they’ve already accomplished. That’s no more evident than in studies of the effects of multitasking. In today’s fast-paced working world, we often require employees to juggle multiple tasks and assignments at once.

Yet studies show that multitasking can make it take up to 50% longer to accomplish a project and introduce up to 50% more mistakes. Nevertheless, employees might think they’re actually being more productive simply by trying to multitask, even if they’re performing worse as a result.

2. Bias for Action

Challenges compel us to take action. Whether our choices are right or wrong, we tend to see making some decision as better than not making one at all. However, taking time to reflect actually improves outcomes, even if it delays action.

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In a conducted at a global IT consultancy, employee performance jumped 23% when employees had 15 minutes each day to stop working and reflect on the work they’d done, rather than continuing to work through that same time period without taking stock.

3. Bias For Completion

Human beings are more or less programmed to finish the things we start. Unfortunately, this desire to “check the box” also affects our ability to prioritize.

In an ongoing study currently being conducted by Harvard Business School, two test groups are being compared side-by-side. One group is checking off items as they’re completed, and the other is simply continuing on to the next task. So far, employees who check items off are 30% more productive and enjoy doing their work more.

On the other hand, this desire to cross things off our to-do lists interferes with our ability to make sound decisions about what to tackle next. We often choose urgent work over important work as a result of our desire to get things done. And when it comes down to performance, the boost in productivity alone might not be enough to compensate for poor prioritization.

4. Outcome Bias

Many of us judge someone’s contribution based on the final results of a project to the detriment of other factors, like the process and circumstances that led to the results. Essentially, we tend to confuse efficiency with effectiveness. The value of the results you’ve achieved depends a lot on their context. Think of a CEO who posts exceptional numbers in a booming industry versus a CEO who posts decent numbers in a struggling industry. Who performed better?

It’s hard to say, and performance review may not be making it any easier. That’s why some companies are turning to technology to help overcome decision-making biases and improve productivity.

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For example, one Fortune 200 insurer gave employees data-driven performance scorecards that compared system-generated activity data with employees’ self-reported activity. The comparison highlighted how much employees inflated the amount of time they thought they spent productively. That transparency led staff to self-correct certain behaviors, later increasing productivity by some 17%.

Based on that information, an HR outsourcer was able to build a productivity and effectiveness model that combined the volume of outputs, the complexity of the work, and the amount of active time spent completing it. Not only did that help create a more level playing field for evaluating employees, it also helped the company fine-tune its workflow, decreasing unnecessary overtime pay by more than $500,000 in 16 months.

While technology can be helpful in improving employee productivity and engagement, there’s no substitute for a keen awareness of these biases on a personal level. During your next performance review, or when you review your own employees’ performance, take into account that factors that might affect your own perceptions. No one wants to be shortchanged at their performance review, so keeping a more realistic and holistic view of how people really perform–and how they perceive their performance–can benefit everyone involved.

Correction: A previous version of this article suggested that the Harvard Business School completion bias study is concluded, but it is ongoing and results have yet to be published.

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Francesca Gino is the Tandon Family Professor of Business Administration at Harvard Business School, and Craig Seebach is Vice President of Back-Office Workforce Optimization at Verint.