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Managers are falling for this cognitive bias when giving performance reviews

July 19, 2022 - 6 min read

Proximity bias impacts performance reviews

 

After the immense workforce shakeup of the past two years, many workers are now settling into permanent hybrid or fully remote roles. For many workers, that’s a welcome change from the full-time office setting that previously was the norm. Among workers whose jobs can be done from home, 60% say they’d prefer to keep working remotely.

But the tumult of changing work norms isn’t over. Many workplaces are still trying to adapt to the new world of work. Employers are navigating how to keep teams unified with scattered employees and asynchronous schedules. Adjusting to this new order comes with some expected logistical challenges, but there are other less obvious challenges that may become more apparent over time. Some of these include ensuring employees have opportunities for mentorship, advancement, and relationship-building, even if they’re part of a dispersed workforce. 

As employers confront these difficulties, we wanted to know how the new landscape of work was impacting performance evaluations. The BetterUp Research & Insights team in collaboration with ICONIQ mined 360-degree evaluations from over 50,000 managers and peers to learn whether working in person, hybrid, or fully remote affected a worker’s performance reviews.

 

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When it comes to performance reviews, in-person employees have the advantage

Our analysis of BetterUp member data shows that managers consistently evaluate remote employees less positively than in-person employees across nearly every dimension including job performance, authenticity, and a number of leadership dimensions. The same held true for hybrid employees in some cases.

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Managers and peers generally agreed in a few areas, and in particular both groups rated in-person workers higher than remote workers on coordination and collaboration, executive presence, and alignment. 

Beyond those few areas of agreement, however, managers and peers diverged in their evaluations in other areas. In particular, managers rated in-person employees highest on recognition, social connection, network leadership and relationship building, but in these same areas, peers rated hybrid employees highest.

And peers actually rated remote colleagues the highest scores on some dimensions, such as authenticity, social thriving, resilience, and emotional regulation. In these areas, managers rated in-person employees the highest.

Managers need to understand how bias can impact their judgement

The data suggest that managers may be susceptible to proximity bias when it comes to employees who work on-site compared to employees who work from home. Proximity bias occurs when you favor the workers who are in close physical proximity to you over those who work off-site. 

It’s easy to see how proximity bias takes hold. When you share a physical workspace with in-person employees, you have a chance to actually observe them in the course of their daily work. You get to see them in action, you overhear their work calls, and you know exactly when they show up and when they call it quits each day. 

Building and deepening your relationships with in-person employees may come with less effort, especially if you have casual, impromptu conversations when you run into them in the break room or happen to share an elevator together. This added time and opportunity for connection may play a role in how you see their value compared to that of other employees.

What we’ve learned from the pandemic, however, is many companies thrive with a dispersed workforce. Workers can be productive, creative, and dedicated to their work without a boss peering over their shoulder. In some cases, remote work can lead to better performance.

While the additional face-time you get with in-person employees may instill a greater sense of familiarity, if proximity bias clouds your judgment, it may lead to unfair performance reviews. And if this bias shows up in evaluations, it’s not hard to imagine how it might extend to other decisions, such as which employees are chosen for the most desirable assignments, special opportunities, and promotions. It could also lead you to pass over the hybrid or remote workers who would actually be a better fit for a particular assignment or role—hurting both the overlooked employee and your organization.

How to overcome proximity bias

Fighting proximity bias is essential to keeping dispersed workplaces equitable and ensuring that all of your employees get the support and opportunities they need to do their best work. So how do you overcome this cognitive bias? As employers continue to rethink the composition of their offices and the working arrangement options available to their people, it’s also imperative that they revisit the way they conduct performance evaluations. 

The flexibility of hybrid and remote work is a major benefit for many employees, and it can help employers build the diverse, creative, resilient teams necessary to pull off excellent work. But the performance evaluations of the past—based on traditional office setups—don’t fit into today’s more fluid structure. The data suggest that evaluations themselves need to be redesigned to account for the performance measures that matter most in a dispersed setting.

One way to guard against proximity bias is to place greater weight on peer evaluations and ensure you collect reviews from a variety of workers, including an employee’s subordinates. Peer evaluations are likely more reliable reflections of an individual’s true character and workplace contributions, especially in remote or hybrid arrangements, and need to be considered for a holistic picture of an individual’s performance.

Another way to curb proximity bias is to focus on fostering a sense of connection and belonging. Schedule frequent, regular check-ins with employees, and keep tabs not only on their work progress, but also on how they’re doing, what they enjoy, and who they are as a whole person—not just as a member of the team. Building strong relationships with employees regardless of their location is critical to developing the insight you need to support your teams. 

Proximity bias is a real challenge in the modern workplace, but organizations can take measures to mitigate it. In doing so, they’ll ensure workers have a chance to shine, no matter where they get work done.

 

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Published July 19, 2022

Erin Eatough, PhD

Sr. Insights Manager

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