Performance Reviews Are Pointless And Insulting -- So Why Do They Still Exist?
I'm the HR Director for a growing manufacturing firm. I started the job in July. I report to the CEO.
I'm putting my 2018 plan together. One thing I told my boss "Jake" when he interviewed me is that I plan to talk him out of the company's annual performance-review process.
I agree with you that making every employee fill out an evaluation form and sit down to talk about it every year is a huge waste of time and energy, and most employees hate performance reviews.
If the relationship is healthy between the manager and the employee, they're having regular conversations anyway — including quarterly and annual planning sessions. If that isn't happening, I can help managers fix that -- but having more conversations doesn't require an evaluation process.
I eliminated performance reviews at my last company and everyone was happy about it.
Of course, employees need to be able to get feedback when they need it. If they can get that feedback without being graded like elementary school students then it's a win-win for everybody.
Jake says he might be open to the idea of abolishing performance reviews but he needs a very good reason to do so. In my last company I polled our managers (37 of them) and 35 were in favor of getting rid of performance reviews.
The other two managers were neutral. We knew the employees were negative about the performance review process because the subject came up regularly in our Town Hall Meetings and survey responses.
Jake wants me to write up a proposal for him. Thanks in advance for any insights you can share!
Performance reviews are artifacts left over from the Industrial Revolution.
They come from an earlier time, when work was designed on the mechanical model I call Godzilla.
If employees stand in front of a conveyor belt all day polishing widgets, you can easily count the widgets as they come down the line and see which employees are hitting their goals and which folks are missing them.
Knowledge Work is is more complex and nuanced than that. Knowledge Worker jobs don't boil down to a number of widgets polished per hour or per quarter.
Somebody on your team might have a breakthrough idea today precisely because they ignored the passing parade of widgets and stared off into space for 45 minutes.
That's the energy you want to inspire and capture in your company — not widget-polishing energy!
Performance reviews are not effective at improving performance. They have never shown their value as leadership tools -- but they make excellent power-and-control mechanisms, and that is one reason some companies have trouble giving up on them.
It doesn't help an employee move forward for a manager to tell them what they did well and did badly last year. If a manager needs to give someone feedback, they should do that in the moment — not months later.
When we are lifted up in the service of a larger goal than to hit our weekly and quarterly numbers, we don't need to waste time rating and grading employees. We only need to reinforce them and give them room to run!
We need every millisecond of our time and energy to be spent inspiring and encouraging our teammates — not to mention moving obstacles out of their way.
1. They take up expensive staff hours for no observable gain. It takes hours and hours of time for employees and managers to complete performance review forms, get them approved, set up performance review meetings and handle the paperwork. The next year, they do it all over again.
Who benefits from that massive time and energy investment? Do your customers benefit? They don't — because if there were customer-benefiting information to be shared it would have happened whenever it came to light, not now.
2. Their purpose is unclear — and always has been. Various people will tell you that performance reviews are essential for letting employees know how they're doing (why?), to justify pay increases (you don't need performance reviews for that), or to create a paper trail if someone should need to be terminated (doesn't work, because managers almost always give struggling employees average-to-good performance reviews. Later they say "I was trying to motivate the employee!").
Anything you might want to accomplish through performance reviews can be accomplished without them.
3. They are unfair. Companies come up with rigid systems (five-point review scales and ten-point scales!) but they never solve the biggest rating challenge — the fact that managers vary dramatically in their assessments of Excellent, Good, Average, Fair and Needs Improvement. Performance reviews are also unfair because they tend to weight more recent events and results more heavily than those from earlier in the year. They are unfair because managers have biases.
4. Performance reviews are insulting. If I hire someone to work for me doing graphic design, marketing strategy or software development I can talk to them about the project and our relationship. I can let them know if I'm unhappy with something they do or don't do, but it's not my place to tell them how to do their job or how to live their life.
Performance reviews cement the bad, old idea that when someone is your supervisor, they sit on a higher plane than you do. That's ridiculous. A supervisor in today's Knowledge Economy is an orchestral conductor. The conductor keeps the orchestra together but doesn't presume to tell the musicians how to play their instruments.
5. Every business process requires a clear objective and desired outcome, to pay its way in your busy operation. Performance reviews lack both a clear objective and a desired outcome. No one in your company can say "Here's the outcome we want when we conduct performance reviews next year."
There is no desired outcome except to remind the employees who's a boss and who isn't — and to keep up a time-honored tradition simply because you've always done it.
Talk to your fellow managers and employees and see what they think about performance reviews.
If you can't find anybody ready to defend performance reviews, tell Jake "I didn't hear from anyone who wanted to keep performance reviews going.
"This is our opportunity to streamline our company, save money, act on our team members' feedback and shift our culture out of old-fashioned command and control management into new-millennium leadership!"
Most managers, like most employees, fear change.
CEOs fear change, too. Tell Jake you'll use 2018 as a test year to see if your organization falls apart when you put the kibosh on performance reviews. I predict that like every other company that has done away with them, you'll be much happier when they're gone!