Ever since Deloitte announced their revival of better performance management, the subject as a whole has been under fire. People hate performance reviews, but they need the ratings. The ratings aren’t accurate, but they need to promote. The people they promote aren’t qualified, so you end up hiring new people anyway. The truth is, the poor cycle of performance management blunders can be solved with a simple word: data. Now, you probably already use data, in fact, I know you do. Between your applicant tracking system, your talent management, and even your performance management, it’s a vital part of your organization. However, when you look at the information… how accurate is your performance management data? It’s not.
Idiosyncratic Rater Effect
It’s a bigger problem than you might think. Despite how objective you think you might be, there will always be some sort of subjective and intrinsic assessment that happens when you rate another person’s work. In fact, as much as 61% of the rating can really be of the rater themselves, the remaining 40% is of the person they’re assessing. As Marcus Buckingham (@mwbuckingham), Founder of TMBC, explained:
“... [It] tells us that my rating of you on a quality such as ‘potential’ is driven not by who you are, but instead by my own idiosyncrasies - how I define ‘potential,’ how much of it I think I have, how tough a rater I usually am.”
"..my rating on a quality such as 'potential' is driven not by who you are, but instead my own idiosyncrasies." @mwbuckingham
The Data is Just Wrong
Because we have a tendency to internalize a good portion of performance appraisals, the data accrued in performance management is often flawed. We do need performance reviews to glean performance data, but you need a platform that will help you reduce the amount of human interference with the numbers. Ian Cook, Director of Product Management at Visier, said:
“Decision making is as much art as science. It has also been studied extensively and what we know is that decisions that rely on human interaction alone are most often flawed. The more complex the scenario, the more likely the decision is to be wrong, if it is based solely on the judgement of individuals. The best way to improve decision making is to look for and include data in the decision process.”
Ian Cook, Director of Product Management at Visier, reduces human interference when it comes to data:
As Cook points out, much of our “data” comes from human interaction, especially in the performance management realm. Data in performance management is largely reliant upon how a manager rates their team, but when another person evaluates an employee, the results are different. As Buckingham explained, that accounts for much of the problem in performance management data - the data is simply wrong.
Quality of Data
Although recruiters hate the correlation between the recruiting and marketing departments, the relationship is there. However, one of the differences: big data. Nearly 10 years ago, your marketing cohorts had integrated data into their practices and have already seen impressive results. So now that you’ve begun to integrate data aggregation and analytics into your performance management system, you’re on the right track.
Data isn’t hard to find, but quality data can be. You have to manage the data appropriately and that means assessing performance unbiasedly and aggregating that data to measure performance on a consistent and accurate basis.
Don’t let your performance management data continue to run in the wrong direction. Get rid of the idiosyncratic rater effect, increase the quality of your data and most important, find the right data. You’ve already perfected the use of data in other arenas of your organization whether that’s in marketing or the ATS, for example, but now it’s time to perfect your data aggregation and analysis. You can stop your performance management blunders, all it takes is a little bit of accurate data.
Andre is the CEO and co-founder of ClearCompany. Prior to ClearCompany, Andre was Global Managing Director at Thomson Reuters, where he ran a 1Bn global business across 90 countries. Prior to Thomson Reuters, Andre was responsible for product development and operations at CCBN, a company he helped grow from a small start-up to number 36 on the INC 500.