Recognizing the “Halo Effect”
Performance appraisals are important for organizations and employees. Unfortunately, they are not on the top of anyone's list of "favorite things to do", and there are a number of influences, such as memories and natural biases that can affect the impartiality of the manager and thus the effectiveness of the review.
One of the most common biases is "The Halo Effect". This occurs during performance reviews when the manager gives the employee a higher rating than deserved in one performance area because the performer has other highly redeeming qualities or performance areas. In short, the halo effect is when a person's strength or positive quality overshadows his weakness. This leads the manager to be inaccurate in evaluating some areas of performance.
John is a superstar at presentations. He has a great introduction that gets your attention and maintains a strong flow throughout the entire presentation. He even brings in humor with a company-related joke. He offers great examples, makes sure his audience is following him, AND asks for questions and answers them with knowledgeable responses.
However, John couldn't put together a solid excel-based report if his life depended on it. His reports are supposed to contain campaign statistics and analytics so the client can decide whether they should alter a certain campaign or expenditure. John has to ask two co-workers each time to review his reports and give feedback before sending them to the client.
When it was time for his performance evaluation, John's manager gave him high ratings in all areas and glowing comments because John is a likable person who communicates very well, gives thoughtful and engaging presentations and so his average ability to produce reports did not seem as glaring.
John's manager demonstrated the halo effect by inflating John's reporting skills rating because of his great presentation skills.
In order to avoid the halo effect, managers should collect data throughout the year to make realistic judgments in all areas of the employee's performance.
In John's case, if the manager had asked his co-workers how much time was spent re-running his reports, it's likely John's manager wouldn't have been so quick to overlook this development area. If John's manager was really being fair to himself and John, he would have used the performance appraisal as a time to not only provide objective input to John about how he is doing, but also to provide the company with an indication of areas of John's strength and opportunities for improvement.
By analyzing results and taking advantage of best practices in areas where employees are performing well and opportunities for improvement in areas where they are not, companies can receive maximum value from their performance appraisal efforts. The manager can help guide the employee on the path to corporate advancement or career development and the employee gets a clearer understanding of what is expected from him in his daily job duties.
However, effective performance reviews don't happen overnight and organizations shouldn't assume that managers know how to conduct them effectively, even if they have many years of experience as managers. It is important that training is provided to introduce managers to the philosophy of performance appraisals, including a review of the forms, the rating system and how the data gathered is used. Through regular training and "refreshers", managers better understand the company's strategic objectives and how they can use performance reviews to effectively meet company and employee needs.