Creating a fair performance management system (PMS) is crucial for providing employees with a positive experience in the workplace. While PMS approaches have evolved from accountability-focused to development-focused, biases still persist in performance reviews. This article explores the role of technology in addressing biases and enhancing the fairness of the performance review process.
Biases still pose challenges in performance reviews
Despite efforts to address diversity, equity, and inclusion (DE&I) challenges, unconscious bias remains a significant issue in performance evaluations. According to the WTW 2022 Performance Reset Survey by Willis Towers Watson, only one in three employees feel that their performance is evaluated fairly. A study conducted by a tech product firm highlighted the presence of unconscious discrimination against minority groups in performance feedback. Notably, the use of the word ‘ambitious’ in feedback often carries both positive and negative connotations, leading to biased evaluations for Black employees, women, and individuals over 40.
Examining the root causes of biases
The rise of hybrid work environments, where some employees work remotely while others are in the office, has introduced the potential for proximity bias. McKinsey research reveals that black workers, women, and individuals over 40 spend more time working remotely, making them susceptible to discrimination during performance reviews. Additionally, traditional methods of mitigating unconscious bias, such as training, have shown limited effectiveness. Companies need to explore innovative approaches to reduce biases effectively. This is where technology comes into play.
Harnessing technology to reduce biases in performance reviews
Wayfair, a US-based e-commerce platform, serves as an example of how technology can promote fairness and objectivity in performance reviews. By leveraging Natural Language Processing (NLP) technology, Wayfair enhances the inclusivity and fairness of performance feedback. The company adopts a 360-degree feedback approach, gathering input from peers and external stakeholders. The collected feedback is then reviewed by managers and analyzed using a bias tool analyzer developed by the firm. The analyzer identifies potential threats and flags biased language in performance reviews.
For instance, Wayfair discovered that the word ‘confidence’ was frequently used when providing feedback to female employees. However, the interpretation of ‘confidence’ varied among individuals. To address this, Wayfair conducted unconscious bias training during calibration sessions for female staff, raising awareness of the contextual implications of the word ‘confidence’ in feedback. This approach resulted in higher overall ratings for women employees and a 7% increase in the number of women in leadership positions.
The implementation of technology to reduce biases is not limited to Wayfair. Global ride-hailing firms are also planning to leverage technology to enhance engagement and create a fairer experience for their diverse talent.
Developing a fair PMS approach is essential for providing a positive employee experience. Numerous studies have demonstrated the link between a fair and objective workplace culture and high employee engagement. Furthermore, a fair PMS system can turn employees into brand advocates, attracting top talent to the organization. By leveraging technology, organizations can address biases and improve the fairness and objectivity of their performance review systems, ultimately fostering a positive employee experience and driving organizational success.
