Performance review

A performance review is a structured, documented evaluation of an employee’s work over a defined period, typically feeding compensation, promotion, and development decisions. The traditional form — annual, manager-written, rating-scaled — has well-documented failure modes: recency bias (the last month outweighs the first ten), rating inflation (managers smooth scores upward to avoid conflict), and the idiosyncratic rater effect — Scullen, Mount and Goff’s 2000 study of multi-rater data found that more than half of the variance in performance ratings reflects the rater, not the person being rated.

The modern response is not to abolish evaluation but to change its inputs: aggregate continuous signal — peer feedback, goal history, competency evidence — collected throughout the period, calibrate across raters, and separate the development conversation from the compensation decision so honesty in one is not punished in the other. The review becomes a summary of data that already exists rather than a memory test.