Here is a good reminder from author Sharon Armstrong about how to avoid eight performance evaluation pitfalls. These are in what I consider is the best chapter of the book The Essential HR Handbook, that she co-authored with Barbara Mitchell.
1. Clustering everyone in the middle performance-rating categories
2. Overlooking flaws or exaggerating the achievements of favored employees
3. Excusing substandard performance or behavior because it is widespread
4. Letting one characteristic - positive or negative - affect your overall assessment
5. Rating someone based on the company he or she keeps
6. Rating someone based on a grudge you are holding
7. Rating someone based on a short time period instead of the entire evaluation period
8. Rating everyone high, to make you look good
There's other great information in this 250-page book that is valuable for any manager, and especially good for managers who are new in their leadership position.
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