Review Finds 20 Fair Practices for Performance Reviews

Summarizing the recommendations in 18 articles from peer-reviewed scientific journals, two business professors described 20 best practices for ensuring performance reviews are considered fair by employees. The article referred to three kinds of fairness. Distributive fairness refers to the treatment of different people. Procedural refers to the fairness of the process, and interactional to whether employees feel the reviews were communicated to them with respect. Authors Richard Posthuma of the Univ. of Texas at El Paso and Michael Campion of Purdue Univ. made a point of breaking out practices for design of the system from the use ("implementation") of the system, saying the former does not get enough attention. The performance review (PR) best practices follow, along with some explanations from the authors, and editor comments in parentheses:

Design Phase

• "The content of the PR should be based on a job analysis or shown to be job related," meaning it should relate to job descriptions and goals.
• "Subject matter experts should have input on the factors to be evaluated in the PR," the best experts being people who do or have done the work.
• "The PR should be based on observable job behaviors to the extent possible," rather than traits. It should also be specific, with measures like "Made good suggestions" instead of "Initiative."
• "The PR should be standardized, using forms and administrative procedures, for example, and reliable." (In other words, the same method should be used for all workers, using measures that would create consistent ratings by different reviewers of the same person.)

Implementation Phase

Relevance

• "The PR should compare employees doing the same or similar work," because that is who workers will compare themselves to.
• "Objective performance data should be considered to the extent possible."
• "The PR should be aligned with organizational goals and objectives."

Timing

• "The PR should be conducted close to the time that the results will be used for personnel decisions." (For example, if raises are based on reviews, announce the raises as soon as you can after the reviews are done.)
• "Reviewers should have the opportunity to frequently observe the employees' job performance or otherwise be knowledgeable of employees' performance." If you use customer surveys, therefore, make sure one or two customers don't get too much say, and that results can be tied to the employee. (Or use a team measure on each member's review.)
• "The PR ratings should be spread out over appropriate intervals—not too frequent and not too rare." An annual review is too late to tell someone they haven't been doing something right for months.

Independent Review

• "A higher authority should evaluate PR results, or multiple evaluators should be used," as in 360-degree reviews.
• "An appeal mechanism should be allowed."
• "The PR process and results should be documented."

Guidance

• "Reviewers should be given specific and clear instructions on procedures," stressing consistency, possible biases, and "the need to treat employees with respect and dignity when conducting the review."
• "Reviewers should be trained in how to administer the PR."

Communication

• "PR results should be discussed with employees."
• "Policies on the conduct and uses of the PR results should be communicated to employees."
• "Performance expectations should be clearly communicated with the employees." Prior to the appraisal period, "employees should have a good idea of what will be expected of them."
• "Employee participation should be allowed… in the PR process (e.g., setting goals, providing input on performance)." Repeated studies have shown this leads to higher employee satisfaction.
• "The PR should be developmental (e.g., indicate how to improve)." Among other reasons, the "subtle message… is that the employee will be a valued member of the organization in the future."

Increasing fairness "should increase the acceptability of the information employees receive during their reviews, reduce the likelihood of complaints, and increase motivation…" Posthuma and Campion write. And it meets the "Golden Rule of Management," which suggests managers treat their employees the way the managers want to be treated by their bosses, they add.

Source: Posthuma, R., and M. Campion (2008), "Twenty Best Practices for Just Employee Performance Reviews," Compensation & Benefits Review 40(1):47.