Last week Marcus Buckingham dropped a well timed bombshell into the world of HR data with his article that “Most HR Data is Bad Data”. Marcus focused on performance reviews and argued that a significant body of evidence over 15 years demonstrates that “each of us is a disturbingly unreliable rater of other people’s performance.” He goes on to say that the rating actually says more about the rater than the person being rated.
Your manager is an idio...syncratic rater
Marcus draws on evidence to demonstrate that a rating on a quality such as “potential” is driven not by who you are, but instead by your manager’s own idiosyncrasies; how the manager defines “potential,” how much of it they believe they have themselves, and how tough they are at rating others. Based on the evidence Marcus estimates that on average, 61% of a rating of is a reflection of the manager not the appraisee. He’s given this a name: The Idiosyncratic Rater Effect. So next time you’re getting a 3 for innovation when everyone knows you’re clearly a 5, just mutter ‘IRE’ under your breath.
“Bottom line: when we look at a rating we think it reveals something about the ratee, but it doesn’t, not really. Instead it reveals a lot about the rater.” says Marcus Buckingham.
If you buy into that, and Buckingham is fairly insistent you should, because there’s a lot of data to support it, then it begs a big question. Are you making decisions about pay, promotion, succession, talent on bad data? If you can’t trust what your performance ratings are telling you, do you really have a handle on talent in your business at all or you flying with, as he puts it ‘The most dangerous kind of blindness - we think you can see.’
Training doesn’t help
If you were thinking you could train people to improve ratings you will be disappointed. Marcus argues that “no amount of training seems able to lessen this effect.” Does this mean businesses should drop performance reviews? No, but it does mean you need to look at the review process. For example, 360 reviews can provide a broader perspective and a quality check on the manager’s perspective..
So what should we do?
The key I believe is that the performance review provides a starting point for a conversation, and it should be more about mutually agreeing goals, objectives and resources to help you develop. Looking forward more than backward. Totara LMS’ Performance Management module and other progressive LMSs and Talent systems can support this conversation, with the performance management module enabling a 360 review that at least removes the primacy of a single rater. It also enables managers and team members to collaborate on a development plan, and then actively manage it during the cycle, not storing up feedback to the end.
As always, honest discussion is going to yield better results than following a formula and treating the PDR as if it were a college transcript. It’s a far more nuanced conversation, and it’s time organisations embraced methodologies that will really deliver performance improvements.