Courtesy Coqual

With the end of the year approaching, some organizations are starting to prepare for annual performance reviews. Performance evaluations are controversial—no one seems to love them, and some companies have even abandoned the practice.

But Julia Taylor Kennedy, executive vice president and head of research at Coqual, a nonprofit thinktank, says she thinks such evaluations can be extremely valuable because they provide a structure for employees to get feedback if they’re not otherwise getting it. (The best practice is more continuous feedback and goal-setting.)

Recent research from Coqual, however,  has found that performance reviews are susceptible to bias. And that’s a factor in organizations’ struggles to create inclusive workplaces and retain diverse talent.

We spoke recently with Taylor Kennedy about what specifically is wrong with performance reviews, and how we can make them better. Here is a transcript, edited lightly for clarity:

What types of bias do we see with performance reviews and how do they present themselves?

Obviously performance reviews are an opportunity for a lot of bias to creep in because they are quite subjective. It is one manager or leader's take on how someone on their team did over the past year. so there's a lot of opportunity for bias to creep in, whether you don't remember something really well that happened in February or whether you hold an unconscious bias about someone based on their identity. We focus, in our research, on race and ethnicity, but there is opportunity for all kinds of bias to creep into performance evaluations because they are necessarily one person's opinion of how someone did.

What we see, in our data, about how performance evaluations run today, is those who are being evaluated see some real gaps in how they're being evaluated relative to their peers. So for example 21% of Black men say, 'I was evaluated on different criteria from my peers.' 17% of Latinx men would say the same, whereas only 3% of white men would say, 'I'm evaluated on different criteria than our peers.' This speaks to a perception gap that we pick up on in a lot of our research. Those who are evaluated on harsher criteria are more likely to see it than those who are evaluated on more permissive criteria.

Something else that we saw in our research on equity in the workplace, where we examined performance evaluations, was that Asian professionals were the least likely of any group to feel their evaluations actually reflected their contributions. We often hear about Asian professionals as being a model minority, but it's a complicated experience for Asian professionals that has some invisibility attached to it. All of this data that I'm citing is from a nationally representative survey that we ran earlier this year among college educated professionals in the US.

The third piece of data that I'd bring forward in terms of bias and performance evaluations—and it's the one that we think is the most thought provoking in some ways—is around colorism for Latinx professionals. Looking within the group of Latinx professionals, when we asked, 'do your evaluations accurately reflect your contributions to the company?' 72% of Latinx professionals who had lighter skin said yes—that's almost three in four that said, 'Yes. My evaluations reflect my contributions to the company.' It's a pretty high number. When you look at those who self identified as having darker skin and Latinx, that number drops from 72% to 46%. Less than half of those with darker skin say, 'yes, my performance evaluations reflect my contributions to the company.' They're seeing huge bias in terms of how they're evaluated. The majority of Latinx professionals with darker skin say, 'my performance evaluation isn't reflecting my contributions.'

Are there common ways in which the bias manifests itself, such as through a focus on subjective areas?

Yes. So we see that phenomenon when managers focus on vague things like executive presence, which was a term that was thrown around for awhile, someone's potential, readiness for the next step in their careers, or gravitas. These terms that indicate the employee doesn't quite have an 'it' factor, which is very subjective. The other thing that we often see within the tech sector, for example, is that those who don't look like leadership are held to a higher bar, even on hard skills. We hear this especially from Black and Latinx women, and sometimes we see this with white women, too. They're asked to take coding tests to progress to the next stage and receive a promotion, which a male counterpart may not be asked for. Or, if they're in business development, in any sector, they're asked to meet a higher bar in terms of sales or conversion than male counterparts.

So sometimes [bias manifests itself in] those really squishy things, and sometimes it's just a higher bar of expectation. The third area where we see a miss for performance evaluations at the end of the year is we often see that insider groups are more likely to get the feedback they need to improve. There's a greater appetite for risk with those who have a lot of potential or the 'it' factor. As a result, there's a smaller likelihood that those who a leader might not feel comfortable with will receive the feedback that they need. If you have a leader who doesn't have a lot of personal relationships with people who are Black, they may be less likely to sit down with a direct report who's Black and say, 'Let me tell you how to improve on this one thing that I think you need to move forward.'

What are the costs of biased performance reviews to an organization, and what are the advantages of addressing that bias?

The costs are huge, and they're even bigger today as expectations of clients, investors, and colleagues grow higher in terms of having a fair, equitable workplace. One cost is merely that you're going to have much slower traction if you're looking to diversify your ranks. Even when it comes to retention—not even progression—of employees with different backgrounds, if they don't feel they're being assessed fairly and don't have a runway to progression at your organization, they're going to walk right out the door. We're in the midst of a great resignation. That's a retention talent cost. There's a progression talent cost because if you don't have a set of individuals with diverse backgrounds in your high-performer class, you're not going to be moving them up. You're not going to have a pipeline to leadership that matches the representation of your customer base or your investor base. Building on that point, there's also a cost around under-developing products and services that meet the needs of your consumers. Without that representation at the leadership table, you're unlikely to get that range of ideas that will pay off and capture markets that white, male leaders may not understand.

What are best practices for mitigating bias in performance reviews?

A few things. The one that we really talk about a lot in the report that we keep hearing over and over again, is a more frequent drumbeat of feedback and more comfort around feedback throughout the year. Then, the performance evaluations themselves are building on a foundation of open dialogue and trust. They don't come as a surprise to either party. If the feedback is delivered, there's more opportunity for pushback. There's more opportunity also for improvement on the part of a report on your team. That kept coming up. Another element to having a robust culture of feedback is having opportunities for 360 feedback. If the manager is unaware that they're acting in a way that might be inequitable, they have a channel to hear that from the members of their team. Of course, for that to work, the 360 has to be trusted.

Sometimes, it's helpful to bring in an outsider, an outside vendor or party, to administer the 360 and to have a communications campaign around it that talks about what safeguards are in place to protect anonymity of team members. And also, with more open dialogue around feedback, the leader should be active in directly green-lighting feedback from their direct reports too. That way, it isn't scary to provide upward feedback, to be accepting that feedback, and to act on it. Those are a couple of really important ways.

Companies are doing all kinds of creative nudges and reminders on different types of bias just before a performance evaluation is given. That can be helpful. We do find that bias training has a very short half-life. Having one bias training, the effects of that really wane in the course of doing business. Having a nudge around bias just before a performance evaluation might be more helpful.

Did your research find that there are types of feedback that are less frequently given to workers of color that would be useful?

When we think of a really good feedback, it's clear, it's quick, and it's actionable. Vague feedback is common, and we hear it's especially common for people that the leader is not comfortable with. Often those people are employees that are Black, Asian, and Latinx. You want to give feedback one-on-one soon after something happened so that everyone remembers. You want to be really clear about what was good about what that person did and what can be improved. Then you want to be actionable about what they can do to improve going forward.

To give you a really quick example, say you have someone who's giving a quick presentation to senior leaders in a meeting. You notice that when they're questioned on that presentation, they get a little hot under the collar and their responses aren't necessarily heard because they give them in a really aggressive way. You might pull that person aside afterwards and say, 'Listen, the information in your presentation was great. I just wanted to give you a couple of pointers when speaking to this group of senior leaders going forward. What I saw was that they disengaged from being able to hear the content of your response, I think because of the way that you framed your answers. Your voice got really loud and you started speaking really rapidly. Next time with this particular group, given the culture of our organization, take a deep breath before you share your response and try to give it in a more measured way, so they're able to hear the content.' That has the recency, the clarity, and the constructive elements in the feedback. Then, the best way is to end by saying, 'How does that land with you?' That way, the person has an opportunity to respond and share whether that works for them or doesn't, and you can enter into dialogue.

What is your take on performance reviews more broadly?

I'm going to talk to you as me, Julia Taylor Kennedy, the individual, who's thought about this and done a lot of research. This is not based on data that we surfaced in the report, just to be clear. I think performance evaluations are extremely helpful. When you have a process in place for people to have that dialogue, it ensures some sort of dialogue happens. When you think about what I just said about feedback not traveling across lines of difference, it's really important to have a container for that conversation. It's equally important that that conversation be high quality because it's also an opportunity to ding people of different backgrounds. That's why I'm saying there has to be both—an organic opportunity for dialogue which leads up to the performance evaluation. In the case where leaders aren't having that dialogue, it is very helpful for someone on a team to have some opportunity to get transparency into how they're being perceived.

So once a year is better than nothing?

Exactly. I would say that's how I sum up my perspective on it as a researcher and thought leader, but that isn't based on our work.

Should there be any changes to performance reviews this year to acknowledge what everyone has gone through during the pandemic?

Absolutely. We saw companies do this last year, and I think it's true this year too. We all, as individuals in society, are dealing with a level of change that asks for agility in our work and personal lives that we've never encountered before. That has to come into account in terms of how we're evaluated. We're also dealing with risks, both health risk as well as economic risk, in a way we've never encountered before. And finally, organizations are dealing with a retention picture that is scarier than they've dealt with before. Those factors have to be taken into account in terms of how we're evaluating employees, what our expectations are, and what we're open to in terms of supporting them in their work and personal lives. We have to acknowledge that people are giving care and are held to a different expectation in their personal lives that is impacting them both emotionally and in terms of bandwidth for work. In order to retain them, that has to be part of the picture and the way we're evaluating them.

Some experts talk about how a best practice now is to discuss personal considerations—such as family contexts and caregiving responsibilities—as part of professional goal-setting and evaluation conversations. Does that create additional opportunities for bias if you're not just talking about the work but also dimensions of people's personal lives?

We are in the Wild West in some ways right now. We're in unprecedented territory. There's no way to take that out of the equation in terms of what someone is bringing to work and how they're approaching their work. In our research, for example, we see that there is still a fatherhood bonus in the workplace. Those who are fathers are more likely to have support from their managers to be paid better. That support doesn't exist for mothers today. This was fielded during the pandemic. So, is there bias in the system around caregivers and what we're giving to support them? Yes. And is it good to be aware of that bias? Yes. Also, there is potential bias that can hold a lot of people back if you're not saying, 'It's amazing what this person is accomplishing, given everything else they're holding together right now.'

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