Was this the right move for the Bureau? Should your organization take a page out of that agency’s book? Read more to learn about why eliminating performance reviews might not work for your business.

The CFPB discovered what it called “significant disparities” between the performance of employees of varying ages, races and locations from its 2012 and 2013 reviews. Managers felt that these disparities were based upon discrimination inherent in the employee evaluation process.

To remedy the discrimination, the CFPB decided to pay all employees as if they had received the highest evaluation score. The policy change cost the agency at least $5 million.

The agency came under fire for deciding to eliminate performance evaluations and pay its employees as though they had received the highest evaluation score.

Columnist Thomas Brown wrote, “Treating the agency’s highest-rated employees the same as its lowest-rated ones is the opposite of fairness.” He pointed out that the CFPB’s top performers deserve to be compensated for their conscientiousness and hard work.

When they are given the same remuneration as their lower-performing peers, the hard workers will experience low morale and become disengaged.

The way to fix the problem of discrimination might not be to eliminate employee reviews. Instead, the CFPB and other organizations should consider revamping their performance evaluation process to remove bias from the equation.

Biases and prejudices are unfortunately a natural part of human nature, but they can be overcome in several ways. The first method to eradicate discrimination from evaluations is to set benchmarks for employee performance. If an employee meets a standard, he or she merits a positive review. Another way to reduce bias is to hold reviews more frequently than once a year.

When reviews are held annually, the supervisor might focus on the one thing the employee did well (or poorly) during the year, as opposed to thinking about all of the actions that worker took.

A third technique of eliminating prejudice is to customize evaluations for roles, seniority levels and departments. When there are no clear yardsticks for expected performance, managers do not have an effective way to measure how employees are doing.

Are you looking for a method to evaluate employees fairly? Call Grapevine Evaluations today at 1-866-386-2163 to learn about 360 Degree Feedback. 360 Degree Feedback is a web-based tool which allows HR users to quickly and easily create, manage, administer and track participation in the performance review process.

Users can also customize the software to meet their unique needs. Make your next employee reviews about fairness and get rid of bias with 360 Degree Feedback.