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Performance Reviews Are Unwise

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Robby Slaughter, founder of AccelaWork, addressed a dilemma posed in the B2B Social Media Digest regarding performance reviews. His suggestion: “We don’t need to review, we need to plan and do.”

Writer Meryl K. Evans studied the question “How can I make a difference with my performance reviews?” By compiling various recommendations, Evans narrowed down the advice to four steps. Unfortunately, that article has since been removed from the website, but we were able to save Evans’ four main steps:

  • Get the company on the same page.
  • Develop your own review process.
  • Check in more often.
  • Change the focus of the review.

Though every company utilizes the information differently, Robby Slaughter insisted that performance reviews are unwise.  After all, no matter how hard you try, your past work can never be changed.  So why focus on the past when you should be focusing on the future? As an alternative, he suggests the following:

Instead of performance reviews, employees and managers ought to mutually define forward-looking performance objectives that include fixed targets tied to future compensation — and honor them.

productivity consultant at work

© Flickr user plantronicsgermany

This viewpoint should be no surprise to our longtime readers. We covered Dr. Samuel Culbert’s performance reviews and its link to employee satisfaction. You cannot change the past, only the future. Isn’t the best way to increase performance to start by defining what we want?

A Bloomberg article by Jeffrey Pfeffer further explores the problems with performance reviews.

Some years ago a human resources manager at a Silicon Valley computer company offered managers free tickets to San Francisco Giants games if they completed their subordinates’ performance reviews on time. When David Russo headed up human resources for software maker SAS Institute, he earned employee cheers for a bonfire celebration that burned appraisal forms and ended annual reviews.

These two examples reflect a broader reality: Managers don’t like giving appraisals, and employees don’t like getting them. Perhaps they’re not liked because both parties suspect what the evidence has proved for decades: Traditional performance appraisals don’t work. But as my colleague and fellow Stanford professor Bob Sutton and I pointed out in our book, Hard Facts, Dangerous Half-Truths, and Total Nonsense: Profiting from Evidence-Based Management, belief and conventional wisdom often trump the facts. And when it comes to performance evaluations, companies ranging from HR consulting firms to providers of software that automate the process have a big stake in their continued use.

The most basic problem is that performance appraisals often don’t accurately assess performance. More than two decades ago research done by professor David Schoorman showed that whether or not the supervisor had hired or inherited her employees was a better predictor of evaluation results than actual job performance. Employees hired by people doing the reviews got higher scores because of the greater psychological commitment managers have to the people they put themselves on the line to hire. That there is rater bias in performance reviews is consistent with the evidence showing gender and race effects on reviews. Similarity is an important basis of interpersonal attraction, and so people who are “different” get lower ratings, other things being equal.

That point he brings up is just one of the many that are problems with these reviews. But what it boils down to is anything that doesn’t better your organization is simply a waste of time, energy, and resources. And all those inefficiencies should be removed in favor of processes that are more effective and more enjoyable for everyone involved. It’s not too late to turn things around.

Transform your organization. To learn more about improving business through productive, efficient systems, contact our consulting firm today!

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