Don’t let Decision Fatigue Create a Performance Review Disaster

As managers are increasingly expected to complete tasks outside of their primary role, they become overwhelmed. With the addition of compensation, staffing and performance processes to their priorities, it is more likely for them to suffer from decision fatigue. With more decision to make, the quality of these decisions become compromised over time.

It is no surprise that managers feel overwhelmed. In addition to the typical duties required by their nine-to-five jobs, managers are often asked to contribute to complex strategic decisions, such as whether they believe John should get that pay raise or Sue should be moved to that other project. When faced with the challenge of dedicating their attention to many important business decisions, it is not unusual for managers to show signs of decision fatigue.

Imagine going shopping for the holidays. With only three people on your list, you’re probably going to spend a lot of time thinking about the recipients’ personalities, their likes, and dislikes, and ultimately choose a thoughtful present that you know they will appreciate. Now imagine having a page-long list of people to buy for. In addition to your immediate family, you’ve been asked to choose something for your in-laws, you need something for your children’s teachers, and you want to get something nice for your assistant. You put plenty of time and thought into gifts early on, but by the time you get to choosing something for the teachers and your assistant, you feel completely drained, and end up picking up a pack of gift cards to the store on your way out.

Fortunately, holiday shopping only happens once or twice a year but for many managers, facing an exhausting number of decisions occurs on a daily basis. As a manager’s decision-making “reserve” becomes more and more depleted, the quality of their decisions will start to deteriorate.

Sources of decision fatigue

Rigorous performance management, compensation and staffing processes in which managers have to make decisions about many people in a short amount of time can leave managers vulnerable to fatigue. Worse, evaluation activities often occur in January when managers’ attention is already being devoted to various other decisions, such as plans for executing new projects.

Consequences of fatigued decision-making

Research suggests that when our brains are tired and we no longer have the cognitive resources available to think deeply about a decision, we use what are called ‘heuristics,’ or cognitive short-cuts to help us. While these strategies can save managers time and energy, they can unfortunately also result in biased and inaccurate performance reviews. For example, a fatigued manager might choose to rate everyone on her team approximately the same rather than differentiate between employees, because the former strategy is simpler and requires significantly less mental effort. Or, a manager might suggest pay increases for the employees on his team he previously identified as being top performers, only to realize later that all of these employees happened to be male.

Eliminating decision fatigue

While it is unlikely that decision fatigue would ever be completely eliminated from within organizations, there are methods that can help mitigate the negative effects of decision overload on performance reviews. One of these methods is the use of calibration talent reviews. Calibration sessions involve a group of organizational stakeholders coming together to discuss the performance of employees, and can, therefore, give managers a better understanding of the unique skills and capabilities that their employees possess. To leverage the value of calibration sessions as a method of reducing decision fatigue, it is important to include a manageable number of employees within the session, to randomize the order in which the employees are evaluated, and to include a diverse group of raters (both demographic diversity and experiential diversity).

A second method to mitigate the potential for decision fatigue is to encourage managers to engage in continuous feedback with employees throughout the year . By creating an ongoing dialogue with employees, managers are in essence “evaluating” their performance on a regular basis. By the time formal evaluations come around, managers will be better equipped to make a fair and accurate decision, and likely even need less time to do so.

Managers are asked to make hundreds of decisions every day. While some of these decisions may be relatively inconsequential, others will directly impact employees and their futures within the organization. Managers should clearly prioritize quality over quantity when it comes to performance reviews , but many organizations’ existing performance management processes leave managers no choice. In a “never off” world where managers may find it increasingly difficult to remove themselves from decision requests, it is time to take a step back and ask instead how we can make managers’ decision-making responsibilities less demanding and make their decisions more accurate and efficient.


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