Performance reviews are a big fat waste of time

Performance Review

Welcome to your annual performance review.

In the next 90 minutes we will:

  • Review your performance over the last 12 months
  • Follow up on the goals from last year’s review
  • Set new goals for your professional development and career
  • Handle any problems you might have had in the last year
  • Fill out this 8-page form required by HR
  • Coach you to better performance
  • Get your totally open and honest feedback to my leadership

And of course, we will both pretend that the results of this little chat will not in any way influence the salary adjustments coming up in two months.

Now… any questions?

It seems that no one likes performance reviews. Joel Spolsky, the CEO of Fog Creek Software certainly doesn’t:

At two of the companies I’ve worked for, the most stressful time of year was the twice-yearly performance review period.

For some reason, the Juno HR department and the Microsoft HR department must have copied their performance review system out of the same Dilbertesque management book, because both programs worked exactly the same way.

First, you gave “anonymous” upward reviews for your direct manager (as if that could be done in an honest way). Then, you filled out optional “self-evaluation” forms, which your manager “took into account” in preparing your performance review.

Finally, you got a numerical score, in lots of non-scalar categories like “works well with others”, from 1-5, where the only possible scores were actually 3 or 4.

Managers submitted bonus recommendations upwards, which were completely ignored and everybody received bonuses that were almost completely random.

The system never took into account the fact that people have different and unique talents, all of which are needed for a team to work well.
(source)

Almost every medium-sized or large company does performance reviews. Everybody does it – and I think it’s time to stop!

Performance reviews are fundamentally broken. Managers hate them and fear them and resent the drain on their time.

Employees often leave reviews demotivated, cynical and with no clear idea of how well they’re doing and how to improve:

Research into British workers found a quarter of respondents thought managers simply regarded the reviews as a “tick-box” exercise, while one in five accused their bosses of not even thinking about the appraisal until they were in the room.

Almost half (44 per cent) did not think their boss was honest during the process, 29 per cent thought they were pointless, and a fifth felt they had had an unfair appraisal, according to the YouGov poll of 3000 workers.

Only a fifth believed their manager would always act on what came up during the review and 20 per cent said their boss never bothered to follow up any concerns raised.
(source)

There is a lot of advice out there on how to fix performance reviews but in my opinion, performance reviews would still be worse than uselss, even if we could fix everything that is currently wrong about them and the very fact that companies fell the need to have them, shows that something is seriously broken in our workplaces.

Here’s why performance reviews and appraisals are such a waste of time and why our workplaces would be better off without them.

1: Everybody hates them

Managers actually cite performance appraisals or annual reviews as one of their most disliked tasks (source) and as we saw above, employees dislike and distrust the process too.

Performance reviews are supposed to be about giving people feedback on their past performance and setting goals for the future. This is impossible in a format that people dislike this intensely.

Studies show that if you’re in a bad mood (and lots of people are during their review meetings), you’re not open to criticism and suggestions. You’re also almost certainly not in the mood to make big plans for your future growth and development

2: They try to do too much

Tom Coens and Mary Jenkins in their 2000 book called “Abolishing Performance Appraisals: Why They Backfire and What to Do Instead” argue that employee reviews take on too many tasks at once. They’re about communications, feedback, coaching, promotion, compensation and legal documentation. Good luck doing all of that in an hour or two!

3: They become an excuse for not talking for the rest of the year

“Yeah, I know that Johnson in accounting is lagging a little and seems dissatisfied, but his performance review is coming up in 4 months – we’ll handle it then.”

No. No, no, no!

In fact, If you have good, open, honest communication between managers and employees, if people constantly know what they do well end where they can improve then you have no need for a formal review process.

4: They are too structured and formal

Many companies have noticed that formal reviews are not working and the response, overwhelmingly, has been to formalize them more. There are now more questionnaires to fill out before, during and after for both employees and managers. More boxes to tick. More ratings on a 1-5 scale More time spent preparing.

But here’s the thing: This actually detracts from the value of the conversation you will have. The more you structure the conversation, the less likelihood that you will actually get to talk about what’s important.

The more boxes to tick, the more likely it is that it will get treated as an exercise in “filling in the blanks.”

5: They focus too much on the quantifiable

Joel Spolsky has another good example:

…one friend of mine was a cheerful catalyst, a bouncy cruise director who motivated everyone else when the going got tough. He was the glue that held his team together. But he tended to get negative reviews, because his manager didn’t understand his contribution.

Many of the most valuable and important things we contribute to the workplace do not fit into those little check boxes. If a manager doesn’t understand this during the year, he will most certainly not get it in the performance review.

6: They may not be formally connected with promotions and salary negotiations – in reality everyone knows they are

A lot of companies have noticed that performance reviews go even worse when they also double as negotiations about salaries and promotions.

Consequently they have separated these two processes and will first have appraisals and then later on salary negotiations.

Riiiiiight. Does anyone expect this to work? Will managers forget everything they said in the appraisal when setting salaries later on? Will employees fall for this and be more honest, rather than try to make themselves look good?

Of course not. But trying to pretend that’s the way it works just adds another layer of deception to the whole sorry mess.

7: No one says what they really think

Managers can hold back from offering negative feedback because they fear conflict.

Employees often don’t offer honest criticism of managers and workplaces out of a fear of offending and the knowledge that, regardless of formal policies, the content of this talk will affect your salary.

In short, everyone is on the defensive from the beginning.

8: They take a LOT of time

Everybody’s busy these days, and on top of your regular tasks, once a year you have to find time to prepare for, execute and follow up on the performance reviews. To make matters worse, very few companies factor in this time in peoples’ schedules and give them a lighter workload during those weeks.

This means that rather than doing it right, many people focus on doing it fast and just getting it over with, making the whole process worse than useless.

9: They become a crutch for bad managers

If you’re not capable of giving your employees regular, specific, timely and relevant feedback (good and bad) – you should not be a manager at all.

And formal performance reviews are not the solution! The managers who actually do manage to give worthwhile performance reviews are invariably also those who don’t need to have them because they already excel at providing regular, constructive feedback.

What to do instead

A 2006 Harvard Business Review article talks about how to fix employee reviews by doing things like:

  • Have them more often than annually
  • Make their purpose clear
  • Give continuous feedback
  • Add forced ranking of employees (worst idea ever!)

But I think the solution is a lot simpler: lose’em. Stop having formal employee reviews, whether annual, semi-annual or quarterly. They’re not only a waste of time, they’re actively harmful to motivation and happiness at work.

As Peter Block says in the foreword to the Abolishing Performance Appraisals book mentioned above:

“If the appraisal process is so useful, we should consider using it in our personal lives. Would we say to our spouse, significant other or intimate friend, ‘Dear, it is time for your annual performance appraisal. For the sake of our relationship and the well-being of the family unit, I want you to prepare for a discussion of your strengths and weaknesses and the ways you have fallen short of your goals for the year.

” ‘Also, honey, I would like for you to define some stretch goals for the coming year.’
(source)

Good luck with that :o)

Your take

What do you think? Do you know of companies that have abolished performance reviews? Do you know of any that have them and do them well? What happened at your last performance review? Please write a comment, I’d really like to know.

Related posts

73 thoughts on “Performance reviews are a big fat waste of time”

  1. I for one am against them. :) I understand their purpose but they are a product of FEAR and such, conflict with my view on how things should be handled.

  2. I don’t completely disagree with the notion of ditching performance reviews as we know them. The process is a burden to everyone involved. But what would you replace it with? I mean, if you just remove the review process and do nothing else, then you’re putting quite a bit of expectation on the few already shaky performance indicators to inform the employee on where they stand.

    The most obvious based on your article is managers. You better hope you’ve got a good manager that communicates frequently and honestly or else the salary increases will remain just as random and meaningless. I’m no analyst, but I would bet that the bigger your company the more bad managers you’re likely to have which just thows the whole thing off.

    Another important indicator is the employees themselves. The review process is a forum for those who might not be as loud about their successes a chance to speak up and feel their doing it in a formal, less selfish way. Without it, we rely again on great managers that keep tabs on every little thing. In consulting or contracting that might not even be possible as employees are often on their own for months at a time.

    I’m all for losing this archaic process, but I think their needs to be other factors in place before you pull the plug.

  3. I’ve recently left a company where performance reviews were ditched (though it was small – only 10 employees!), but it was replaced with…. no feedback whatsoever! Personally I found this tough to figure out where you stood at all and gave no real way to communicate with the directors.

    I think that formal reviews do suffer from the points you raised Alex, however I think the message should be to replace them with frequent, informal reviews rather than removing them completely. How these should work and the exact format I’m not really sure of though…

  4. I’ll fess up to an obvious fact: Most managers do hate conducting performance reviews. If they thought they could get away with it, they’d probably skip the whole annoyance completely.

    In too many places, performance evaluations are sloppily done and not taken very seriously. A lot of supervisors would rather endure a root canal than write and deliver a performance review, particularly if there are some hard, cold truths that they can’t avoid discussing.

    But in spite of all the problems and resistance, I‘m a solid believer in performance appraisal. I think performance appraisal is critically important for any organization that’s more sophisticated than a mom-and-pop store—or that wants to be.

    As hard as performance appraisal may be—and done right, it is hard—I’m convinced that we do it because it’s an ethical obligation of leadership. Every person on the team wants the answers to two questions. First: What do you expect of me? Second: How am I doing at meeting your expectations? The performance-evaluation process answers those two questions. So why do we do performance appraisal? Because as leaders we have a moral obligation to do so.

    And we also have an obligation to put the time into performance appraisal that it deserves. Goodness gracious! Managers don’t spend a tenth as many hours assessing and developing and appraising people as they spend in the restroom. But they’ve got the gall to whine about appraisal taking too much time. That’s nonsense.

    Managers hate performance appraisal. Big deal. They also hate budgeting. Grow up, get over it, and start doing it right. You’re getting paid to be a leader — start earning your pay.

    Dick Grote

  5. Peter: Me too!

    Terrence: I like the way you frame it as a “why?” question.

    My answer be that goal setting, follow-up, coaching etc. are all important, but by their nature can not be done once a year – they must be done continuously, at the need arises.

    That’s why I say we should abandon performance reviews and instead follow employees closely and regularly.

    Gidge: You raise some great points. While it is true that many bad managers do not give the continuous and honest feedback that employees need, it’s probably also true that bad managers do bad performance reviews.

    And if a manager can’t give regular useful feedback… then why is that person even a manager?

    You can’t fix bad management with formal performance reviews – you can fix it by education or firing bad managers.

    crs: Thanks for that example. We need feedback to do our jobs – it’s that simple.

    Good managers know what they’re people are doing, know how they’re doing and give continuous, constructive feedback.

    Dick: You know a process is on trouble, when people prefer root canal :o)

    I like your point about performance appraisal – we need to know how well we’re doing our jobs. My point here is that this should be given to us regularly – not once or twice a year.

    So I’m not looking to abolish performance reviews because people hate them (well, not ONLY for that reason :o) but because they give us an alibi to not appraise performance much more often.

    Does that make sense?

  6. Indeed., lose them!

    Everybody knows who is performing and who is not.

    If someone is not performing, today is the day to do something about it. When working together on a daily basis, it’s easy to know who is not performing or who is not satisfied with his/her job. You don’t need a performance review, you need a coffee machine.

    People should be getting payed and appraised for their contribution to the success of the company (or the department, group, etc.), not for fulfilling their yearly goals.

  7. Hmmm…that’s interesting. My manager and I hardly communicate. And I was actually waiting for the annual performance appraisal to air my grievances and discuss roles and plans for the future.

    However, perhaps because my manager hates to do it, or, as she tells me, she loves me and everything is great and therefore we don’t need to do it.

    I actually felt left out coz everyone else is doing theirs and I spent 2 weeks agonizing over my evaluation form – only to have nothing come out of it.

    Yes, I think there is no need for annual or however frequent formal reviews – AS LONG AS the manager and employee communicates regularly and are able to discuss and share with each other.

    One of the good things about my previous job was that my then-manager frequently came into our offices to sit down and chat, catch up on what we’ve been doing, listen to any problems we’ve had. Or she’ll call us into her room for a chat. Or we talk in the hallway. Whatever. I never actually ever thought anything of those chats.

    But looking back, I realize those were regular, informal two-way communications with our managers and they were very useful. They would always know what we’re up to, and we can always talk to them.

    If managers are like that, then yes, we can do away with the annual review. But right now, I need mine!!

  8. I am in a profession requiring annual reviews with mid-term evaluations. It is a lot of work for both the evaluator and the evaluatee, but if done correctly, permits considerable opportunities for reflection and guidance for future goals. We are uprooted every 2-3 years, thrust into leadership positions early on, and expected to handle life and death situations with grace and aplomb.

    The best guide I have found is Bruce Tulgan’s book, “It’s Okay to Be the Boss.” I thought being a hands-off boss was the ultimate compliment (because that’s how I like to be treated—give me the goal and a deadline and I’m there), but that’s not how the majority of employees operate. And it’s definitely not how new or novice employees work best. And doing reviews annually or even semi-annually? That’s not enough. People need feedback every day, whether it’s parameters for a project, performance problem solving, or an “atta-boy.”

    So, I, for one, would rather have a mandated review which we both dread but have prepared for than never having a review or having a “well, nothing’s wrong so let’s leave it at that” emptiness.

  9. Hey Alex, great post! Certainly given me a lot to think about.

    My current system is 6-weekly one-to-one informal catch-ups with each team member which is more of a coaching session than anything else, then once every six months I include a performance review, with a bonus. I was worried about the bonus awards seeming random so I turned it on its head and get the employee to rate themselves against a set of criteria which we devise and agree together. So everyone knows their bonus award is fair, because they awarded it. I blogged about this here:
    http://www.tomnixon.co.uk/2007/06/employee_perfor.html

    It’s still not perfect though. Some people could be too modest or feel pressure (even if it’s not explicit) to rate themselves a certain way. Perhaps we should ditch this altogether and just have a profit-related bonus scheme.

    All of this does still leave the question of how you award pay rises in a fair way. Could be a subject for another blog post.

    Take care

    Tom

  10. There were several things people have said that have resonated with me and started my thinking. The two that stand out for me are:

    ….one….
    Dick saying: Every person on the team wants the answers to two questions. First: What do you expect of me? Second: How am I doing at meeting your expectations?

    ….and two….
    Terry asking: Why would a business…
    – set goals
    – monitor progress toward goals
    – adjust the goals when change occurs
    – provide coaching and training to employees to help them attain goals
    – remove obstacles to goals, and
    – celebrate achievement of goals

    Kevin Eikenbery talks about training as an event and learning as a process. (http://www.kevineikenberry.com/blogs/index.asp). Performance evals as discussed are events. For learning to occur it feedback needs to be meaningful and overtime.

    With an understanding of leadership and learning as a processes I think both Dick’s and Terry’s questions can be met successfully becuase for Dick, expectation will be infused throughout the process as people regularly discuss, share and create their work together. As they progress they will know if they are going in the intended direction, or if they are not, they can discuss if the new direction is better than the original.

    Terry’s questions are also process and not event directed. Get rid of the event mindset and become more learning centered.

    Mike

  11. I don’t know where you work, but usually it goes like this on my workplace.

    1) I fill in some forms
    2) Manager says i have been doing very well last year
    3) I get 400 $ raise, without asking.

    =)

    Really.

  12. A very thought-provoking post; with some very interesting comments! Loved the one suggesting that if they were such a good idea they should be incorporated into every relationship! Interestingly, I thought that proved the point beautifully, for as I tried to envisage having one with my wife I realised that a marriage that relied on such tools would be one that was devoid of spontaneity and respect. Guess that perfectly sums up many employer/employee relationships.

    I have long questioned the merits of the process, having once been obliged to carry out a review on behalf of a manager who was on maternity leave. Trying my level best to make the process constructive and valuable, after considerable effort, I gave this person a totally honest review, acclaiming his work but suggesting that one area for improvement would be to be more communicative with his colleagues, who he only ever acknowledged them when he wanted something from them. His reaction? To dispute the recommendation and raise a grievance!

    I guess, as with any human interaction, the ideal is as unique as the individuals concerned, but I nevertheless believe that there is little that could beat clearly identified, agreed performance measures that are monitored (jointly or independently according to agreed preference) on a regular basis where there is sufficient interest for both to feel comfortable discussing concerns with the other should the need arise, and with both amenable to discussing any ad hoc issues as and when they occur.

    They say the most powerful motivator of all is a simple thank you, and I feel if a manager makes a point of saying this for routine and non-routine actions, it will be more powerful and effective than a month of performance reviews.

  13. Hi Alex,

    Great topic indeed ! The first time I’ve come up with such a thought is while reading the book “Peopleware”, in a paragraphe untitled “Teamicide behaviors re-visited” when Tom De Marco & Tim Lister says that:


    Here are some of the managerial actions that tend to produce teamicidal
    side effects:
    • annual salary or merit reviews
    • management by objectives (MBO)

    • performance measurement in almost any form

    Of course, performance reviews are part of my usual practice as a manager for years now. Even if I adapted it over the years to make them as open and unformal as possible, this statement made me realize that there was a part of truth there, but without giving me a clue of what to replace it with…

    What I like in your article is that you propose to put instead good, frequent and sincere communication to help tackle bad situations when they happen, give advice when needed and thank when deserved. I love it, that’s just great ! In fact, all of this tends to make me think that performance reviews have been introduced to formalize something that should not be, probably due to a lack of confidence between managers and employees. Formalisation is supposedly more objective, in opposition with the subjectivity of the manager-employee relationship. But everyone knows it’s in fact all but true…

    I will definitely reconsider this practice again in the light of this discussion, even if my current practice makes me happy when I have a review as it’s a true opportunity to have time to exchange views about things we don’t speak a lot about usuallly (what we are both happy or sad about, what we expect from each other, what we’d like to develop in the future, etc.).

    .

  14. At one awful job I had they didn’t tell me that the dresscode was unfair and I had been under dressing for 3 months. Men could get away with very casual clothing, but women could not. I was dressing like others in the office, but the way it was phrased made me feel tiny. They told me to act more like another employee, an employee who didn’t chat (I am friendly), but spent all her day sitting on her ass browsing the internet (I suspect she was billing time to the clients, because she was a star employee)

    I had also, at that point, been in the web industry for 7 years and they expressed surprise about how much I knew about the web.

    The dress code thing chafed my hide. it was never stated there was a dress code and it was something they could have fixed the first time I came in wearing one of my neat logo tshirts.

  15. Agreed. Ban them! Waste of trees.

    The way to keep the organization on track is to review once a year what we thought our goals were, whether they were the right goals, and whether we achieved them. And then what we are going to do next. And this should be in minimalist terms. What has to be done and what are the great opportunities that we are watching. With one more structure, how to communicate when we spot an opportunity we can all move on and heaven forbid, to communicate a threat we hadn’t taken into account.

    The way to manage employees is to ask them to consider their aspirations and roles in the organization and to negotiate their own development. There can be budgets set aside for each individual and a simple question. Are you getting what you want from us and how can we help you further? “Managers” are likely to get a heap of ideas from the things the populace at large want to do. I would bet they would come out of such a process with their eyes gleaming charged up by the energy in their organization.

    I’ve seen this done, BTW. But not in Europe or Down Under.

  16. Hi Alex,

    I came across your blog as I was searching for practical, current, HR related blogs to share ideas on how to build better workplaces.

    Some thoughts on your blogs.

    a) dont agree that performance appraisals should be dumped. If there is an illness and the medicine u take isnt working, u can stop the medicine, but u have to try some other medicine. staying ill does not work.
    one does need a process, which is easy, practical, inspiring, and enabling and you dont know what it is, I dont know what it is, but it can be created with enough effort and collaboration. dumping current process is not an answer.
    How about having a 1 page appraisal form which is filled monthly and which can be filled in 5 mintues, and designed in a way that is enjoyable to both boss and subordinate?

    b) I like your ideas on 9-5 hrs as happy hours.
    happiness at work place can change depending on how is your life going, how is the work going, and how much you enjoy your role/company/industry.
    There are people who fit in their role/company/industry like a T, and their job is always a pleasure for them. Let us call this people workign at resonance quotient 1. There are others where they are happy with the role but not with company and ok with industry, unhappy with role, but happy with company and industry, unhappy with role and company and industry and so on and so forth. The individual will have a different resonance quotient depending on how his individual wavelength is matching with his role/peers/group/company/industry. We need to have a formal/informal process which tracks this resonance quotient and attempts to maximise it.

  17. Excellent post – having just had a chat with my last manager (self-employment is much Happier, but good teams make lifetime friends), I recall the horror that ‘annual performance reviews’ can be – though thankfully, not as a victim. The reason for my lucky escape? Most of my bosses in that period were Managers.

    The clue is in their title – they “managed”. Not “supervised” or “man-managed”. They took on the real world, as presented to them by those both above them and below them in the office hierarchy, and tried to make the best of it. For all concerned, not just themselves. Each realised that their job was not merely to enforce edicts from above, but to also keep their own bosses informed of appropriate management factors, i.e. feedback from their team – ultimately, the customer-facing people who were really earning the company’s money. This was encouraged at the highest level, and filtered down well most of the time I was at the company – ‘turn the hierarchy upside-down’ really worked in our case. Except, oddly, for the HR Dept., who tended to think less ‘Human’ and more ‘Resource’.

    Still, that general attitude made APRs truly a formality. Performance review is a constant process engaged in by anyone who actually communicates (and it’s two-way – it’s just that in commerce, only one side gets to decide what the other is paid). So each employee knew what their manager thought of them all year, and unless HR stepped in with some unrealistic, draconian new process that didn’t reflect that, pay increases were generally seen as fair. Or at least, the assessment process was, even if no-one was ever happy with the final paypacket.

    One incident, though, underlined how ridiculous APRs are in themselves. For procedural reasons, one of my team had to have an APR conducted by a manager who hadn’t actually been her boss for 18 months. My team were top performers, and she was one of the best. She was offered an average grade (i.e. minimal pay-rise) if she met the following targets in the next three months (if not, nada):

    a) Improve attendance – which for the past 12 months had been 100%. 18 months previously, she had just returned from maternity leave, and was just about to have her second child.
    b) Go on a course – which had just been cancelled.
    c) Improve written communication skills. With a degree in English, and as the longest-serving member of the customer correspondence department (seconded to my team), she had already written the company manual on this. The manager, in contrast, did not have a reputation for effective communication.

    As you can imagine, the ‘manager’ in question eventually crumbled under vast and vehement peer pressure – she got the decent pay rise she already deserved. However, HR stood by him for some time, simply because he had followed their processes to the letter – and that’s just Plain Wrong.

    So – what to replace APRs with? Decent management skills. People are more important than processes, managers who don’t manage are merely supervisors, and those who review their team’s performance annually, for the sake of procedure, are simply not managing. Not even remotely. :)

  18. My slant on performance reviews vs root canals?

    They are necessary HOWEVER….

    …The more painful the review is perceived by the staff, the more poorly managed that organization is.

    The appraisals process can be as simple or as complicated as an organization makes it, and in itself can measure of a company’s ability to manage.

    If the majority of the employees have a gag reflex towards the appraisals systems in your organization, its time to tweak your management skills. Something’s amiss!

    Open discussion on the appraisal system itself and find out why employees give them the thumbs down.

  19. Hi Maryanna

    Your comment begs the questions of “why” are they necessary.

    One of the main reasons that they are hated is that people cannot see the value and the people who espouse them cannot show how they add value.

    So, now is your chance!

  20. Reading all the other comments is great, however, I think the key problem with annual performance reviews has been missed. I hate them too, but I know why they’re bad. When you get an annual performance review (or even semi-annual), you’re really being judged on how well you’ve performed in the last 3-4 weeks unless you’ve been screwing up all year long.

    No one has any clue what they themselves were doing a year ago, and a manager certainly has no idea when they’ve got to all of a sudden remember how the year went for X number of employees. If you aren’t tracking what happened every month or week for each employee with a way to look back over it when the time comes to review that progress, you’ll never have a good performance review. It’s not humanly possibly, and turns into a personality contest for how much people like you.

    The problem with getting rid of performance reviews is that most companies tack bonuses (and sometimes raises, but mostly just bonuses) to performance. If you take away the review, you’ll still get a performance rating and a bonus according to that, but you’ll have not idea how you’re being judged. If you give bonuses and raised based on performance, then you must provide an open forum for how you’re being judged and what’s expected. I don’t see the performance based bonuses and raises going away, the only alternative is improving the review process, not getting rid of it.

  21. Matt, don’t you still have an unstated assumption that some mysterious boss has more idea about what is going on than you do?

    A simple alternative system is for the person who wants a bonus or raise to write down why they think they should have one. And have their colleagues vote on it. Then the “boss’s” job is to represent that view effectively when it goes to the next level and requests are being voted upon cross-department.

  22. I like that idea Jo. Would probably force management to open up the books a little more (or at least disclosing budgets), which I think is a good idea in itself, and give the employee a little more proactive responsibility over their own compensation other than receiving what’s given, and complaining when what’s given is not what’s desired.

    I wasn’t trying to assume that the boss knows best, I just assumed that’s how things work, and they generally have more information then the employee. Basically the way I read your comment, you’re arguing for the employee to start the process instead of the manager. I do like that idea.

  23. Pingback: Sit and Listen
  24. Great post. First I’ll answer by saying I’m a manager and I love doing performance reviews, so not all managers hate them (and my team likes them as well). And second, they are fairly easy to do if done properly and I think they are needed. Your #9 point says everything needed in the whole post, most managers use them as a crutch to not giving feedback. If you actually give regular feedback about goal progress and performance, reviews are easy and still worthwhile to help the employee continue to make PROGRESS on their performance.

  25. Alex,

    Very interesting topic, indeed. I must confess that like Mike, I do like to have performance review too. I consider being in a « happy hour is 9 to 5 » company or not too far from it, and even if communication flows and mutual confidence is good, these annual rendez-vous are a plus.

    As an example, we have 6 company values that are public and advertised (sense of responsibility, involvement, cooperation, empathy, anticipation, innovation) and we introduced in the review the topic « your actions in line with the company values »: believe me, this is a very good way to encourage good practice, and an opportunity to discuss what are those values and what they mean practically: when would we do that otherwise ? The review is also the occasion to take time to look back at all the things done in the year (often not far and more than expected), to outline next year directions and discuss evolution wishes, if any.

    It is really a great time to raise the head above day to day activities, and take time to discuss about things we would not address naturally out of a fixed scheduling. Moreover, it is an expected and important event to the engineers, from the feedback I’ve had so far (this has been in place here in the last 6 months only).

    I consider performance reviews as being part of the company biorythm, in the same way as weekly team meeting, or monthly company meetings: the biorythm has to be as enjoyable as possible, but it has to be there !

    Eric.

  26. Good suggestion, but “good luck” in convincing companies this is the way to go.

    Right along side with semi-annual performance reviews is what most larger companies I have been at, use in addition: “R&R (Rating and Ranking)”.
    *Everyone* (no matter what their level) is rated and ranked along with everyone else. This creates a hierarchy of “who is best” and not. Almost inevitably, word gets out where you ‘stand’ in the ranking, if not exactly, then approximately. The R&R is used to determine salary raises and job-level classification. The determination isn’t strict and neither is the level, but they try to draw a line or ‘curve’ through the ‘median’ of money+position against rank. Those who’s salary stands notably above the line, and look forward to a flat or minimal raise or bonus, but those well below the line (making lower than the ‘line’ says they should, could be facing a large, but per-review limit on salary increases allowed. Managers know how to get around some of the limitations — if they *really* want to reward someone, hey put them in a higher salary class as well as give them a raise based on merit.
    “Salary class” used to be based on schooling, number of years in the field, and number of years in the company (years in company being given double weight over other out-side company work). They switched it (not sure that it was an improvement, but the bean-counters preferred it. was to come up with a matrix of your performance grade and how high you were in your salary class. Someone earning an ‘excellent’ but at the top of their class might get a very small raise, but someone earning a ‘medium’ at the bottom of their class might get a big bump to bring them toward the middle percentile of their class. Unfortunately, this led to some high performers getting lower raises than those performing less well.

    In addition to the ill feelings caused by such inequities, I was at companies where people would be constantly competing (instead of cooperating) with other employees — some would go so far as to ‘sabotage’ others so they would rank lower on the chart.

    The attempt was to make the review process “objective” so people couldn’t complain of favoritism or politics, but it was simply a way of hiding such factors. Those who were ‘favorites’ or ‘politically well connected’ always seemed to still get higher reviews, and/or promotions, to justify their boss’s personal feelings.

    At my last company, someone 10 years my junior had very good political skills (they were here (US) on a guest worker program from the UK). At the same time of the review, they also got their green card, which meant they were free to seek employment elsewhere. They got a promotion to the level above me, as well as an excellent review so the manager could give them a large raise in order to entice them to stay (since under the guest worker program, despite it’s illegality, they were paid below market rates). Really left a sour feeling in my stomach, especially because I often had to clean up his messes. But he was alot better at politics than I. Oh well.

  27. Hi, great blog -thank you for bringing this issue up.

    My last role involved running the HR function for an organisation of circa 10,000 staff. I had numerous debates with my HR colleagues about the damage a poorly constructed performance system was doing, however the wider group HR function, continued to use this like a crutch!

    It is so important to start with a clear understanding of what you want to achieve. All too often the boundaries betweeen performance and development get mixed up. I remember over twenty years ago being told you cannot be judge and councillor (coach) at the same time…..

    I could bore you silly with the 100’s of reasons to think through very careful what you are trying to achieve by your performance reviews.

    However probably one of the most obvious is the damage they can do to the team. Individual reviews, no matter how well meaning do cause additional stress and tension in the system. Poorly implemented they can detract away from the positive energy in the organisation and effect allignment. In Demming’s terms: create the wrong focus and in a worse case scenario actual spread new organisational diseases.

    And as for some of those HR ratings! Let me ask how this makes any sense at all (see below an extract from one of the largest UK telecommunications companies).

    You recieve a rating of helpful across a five point scale: Outstanding helpful, Very Good helpful, Good Helful, Satisfactory Helpful, Needs Improving Helful

    (now measure this across 100,000 staff(!!) then multiply this by another 7-8 values and numerous other forms of measurement) — imagine what this does to the energy in the business………

    My view on this -if it doesn’t pass the common sense pub check it should be scrapped!

    Imagine two people down the pub. One looks to the other and says ”I am Needs Improving Helpful”, the other says to their pal ”I am Outstanding helpful!”

    This type of conversation just doesn’t happen – you can analyse this and whether to use a three, four or five point scale, to the ‘nth’ degree however in my view it adds no real, tangible value. You are either helpful or not!

    So in my view it isn’t a do/don’t do performance reviews decision. The real discussion needs to be around allignment and generation of energy within the business. If the performance reviews are not helping to create a real buzz and positive energy then think again!

  28. I was hired as an office manager for 20 employees. I was told that I was expected to do reviews once a year. Not a chore I looked forward to. My first Friday on the job I held a meeting first thing in the morning. I told the employees I did not like doing performance reviews. So from that day forward if any of them had a complaint against another employee or suggestion on improving office procedures or perfomance, they were to send me an e-mail and be as complete as they could be. I would address every e-mail in a timely manner and take what they said under advisement or act upon it immediately.
    The following Monday morning there were 15 e-mails complaining about one employee in particular. It seems that everyone in the office was always covering for her, lying about what time she came in, finishing jobs that she hadn’t completed, etc. I instituted a requirement that each employee turn their computer off before the left at night and that they turn it on as soon as they arrived in the office the following morning. This way I could check to see exactly what time they were arriving in the office and check it against their manual time cards. The IT department gave me a printout every week of each employee. It seems the office manager before me kept her door closed and was unaware of what was happening. I decided right then and there I would keep my door open at all times. If I needed to close it for an important phone call, I would open it immediately when I was done. At the end of the day I called the offending employee in and closed the door. I explained that I was aware of the problems she was having and gave her the option of trying harder or looking for another job. She chose to try harder. I changed her desk so that she sat right outside my office and I could keep an eye on her. I cut back on what her job required and she had less to do. And I also documented everything that transpired over the months. She did show some improvement. When it came time for pay raises, she got the smallest amount. She wasn’t happy. But then she wasn’t doing the same amount of work as the other employees. Those that had willingly pick up the slack, got the largest raise. And rightly so.
    I kept my word to the employees. I answered and addressed every e-mail. When it came time for the reviews, I showed the director about five files and the stack of e-mails I had received from each employee and how I arrived at their performance reviews.
    One file showed e-mails that were suggestions on how to improve office performace. A lot of them were acted upon. Another employee had e-mails showing him to be a chronic complainer and felt put upon. It seems nothing was going to make him happy. A third file of e-mails showed the employee to be a strong team player. Constantly offering to pitch in and help finish an assignment on time.
    My boss was happy with my system. And I got a nice raise. It seems that 18 of those employees under me gave me great reviews.
    What happened to the chronic complainer and the employee sitting outside my office? I told the complainer that perhaps he would be happier working in another company and we did not replace him. Instead we turned his job over to the worker sitting outside my office. She pick up the slack and earned a well deserved substantial raise in the process.

  29. I actually disagree. I find that employee reviews can be engaging and empowering if they’re done with the right understanding, expectations and vision for the employee being reviewed.

    Given my own need to do a performance review for my employee, I stumbled upon an idea that I call, “bloom and prune.” I’d love it if you’d check out my post on this subject and tell me if it changes your perspective some.

    http://kylechowning.com/2008/04/09/employee-reviews-redefined/

  30. I LOVE THEM !

    It brings great fear to my employees. I can always use frases like:”hmmm just look at the f**k-up you’ve made there, lets talk about that in your review”. For months they will be in great fear!
    One that works is:”i seems you like to have your personal reviews a bit sooner this year when I look at this”. It scared the cr*p out of them!

    No seriously: make sure your employees are not surprised bij anything you need to mention in the review. Talk to them, coach them to perform better and lead the way you charismatic leaders! They are your working machines that deliver your profit. Look at it as a car: you steer, you rev it up, but keep looking at the dash to see if something goes wrong. When it does, open the hood (review it!) and add a drop of oil. Though I realize sometimes a firm hit with a hammer on the alternator is the best solution…..

  31. I think performance reviews are a neccessary evil, Yes they tend to have there set backs, but that is one sure way one get to know about them. If this is considered a common pracrtice then i think success would be easily achieved in so many companies.

  32. Good article and makes you think.
    There are important decisions that needs to be made about resources:
    1- Identify performers and reward them
    2- Identify non-performers and Transition non performers to performers or move them outside the company
    Constraint
    3- Whatever you do, protect the company from law suites, (Because some managers will not do their job and they create risks for the company)

    The article says do not do performance reviews for a number of reasons. How does 1,2,3 is going to be addressed then?

    I do not like to wash dishes nor I like to dump the garbage. The solution is not to stop since survey says most people do not like it. Dishes needs to be washed and needs to be washed cleanly. If you do a bad job you will disappoint some people. So do it right and get real.

  33. I used to work at a gaming company where one of the girls in HR did this. Everyday she would go around all the employees and talk to them on a personal level. How they were doing? What would make it a better place to work? Were there any problems she could help with? Everyone loved her She walked into the room and everyone would say hi.

    Then something happened, there was a big HR issue. She talked to people and found a lot of info, presented it to the head of HR….there was already tension between her and the head of HR, who we never saw until the end. After the issue started a month later she was fired. After she was fired a hatchman came in and 3 months later 170 employees were “let go”. Rumor has it now that the company is going bankrupt.

    She put the “Human” in Human Resources.

  34. I think that reviewing one’s boss is an excellent idea, however, I know that nobody would be honset out of fear for their job or fear for their future financial growth.

    I work for a company that has the most ridiculous system there is. They complete a 4 page review if they feel like doing that part and then in the end, the amount of your increase is not based on your skills but is strictly personal. He actually told me during my review that he wasn’t going to reward me for doing my job.

    I asked my current (new to the company) boss for a copy of my review and he said that he didn’t think he could give that to me, it wasn’t legal. He can’t give it to be because he didn’t complete a form.

  35. This is a great break down of the fundamental flaws of performance reviews. No one wants to ask what they can improve on in a situation where the boss is going to be determining their future salaries and promotions. Not to mention that doing such during a performance review means that it’s too late to improve. I think that people genuinely want to improve their weaknesses, and build on their strengths, but are often intimidated by the thought of asking for feedback. Great Post!

  36. THANK YOU. I hate performance reviews. I hate the idea of them. You are absolutely right that if you can’t talk to your employees on a regular basis you should not be a manager. Let’s help good managers become great ones and move managers that don’t have the people skills to another well paid position.

  37. I am now looking forward to retiring altogether. I have given up trying to work hard. The modern organisation has destroyed the link between hard work and the motivation to do it. Throughout my career -40 years. by and large Jobsworths have ended up in managerial roles. Most large firms only make money because they have engineered a monopoly in what they produce. There is no relation whatsoever between managers what they do to manufacture that profit and the bottom line. Performance reviews are a completely phoney exercise: lies damn lies performance reviews!

    In the past 9 years I have lost 25% of the value of my salary. My job has been dumbed down by a series dumb managers who have no idea how lead people or lead us to better times.

    I work for a very large company. It will collapse because of the way it manages people. I feel like I work for a stale organization which has no real creativity. it will be superseded by a Far Eastern dynamic company eventually.

    The top boss in our firm prefers to sail the high seas on a very large yacht.

  38. To the way reviews have traditionally been done, I couldn’t agree more. That said, as an employer, we’ve always used review time for mutual touching base – how are we all doing as a team, and how can we collectively improve that?

    We give employees questions ahead of time, and we have a discussion over lunch.
    • What do you like best / least about your job?
    • What do you think you’re doing great at / not so great at?
    • What would you like to learn more about / talents you’re not getting to use?
    • What questions did we not ask that we should have asked?
    • Etc.

    We find that such mutual reviews provide tremendous results, as they build upon the strengths of the employees while building strength into organizational systems, all at the same time. And we haven’t yet had a circumstance where someone didn’t know they were messing up in areas they were indeed messing up!

    It comes back to what Barry Schwartz learned in the research he provided at TED http://www.ted.com/talks/barry_schwartz_on_our_loss_of_wisdom.html
    “When we are aiming at preventing disaster, we indeed do prevent disaster – but we also ensure mediocrity.” I think that talk is hugely relevant to this discussion.

    The question for us comes down to this: What do we want the review to accomplish? For us, we want greatness. Sadly, most want to prevent disaster.

  39. During my performance review, I was told by my boss that there was only one way to get a pay rise in the organisation: apply for another job, get a job offer for more money and the firm might consider matching the money. Otherwise nothing, no career progress financially at all. All promotions to date have only been in job title only, even after 9 years with the firm.

    To gauge the confidence my manager my manager had in me I asked the critical question: would they have promoted me the job position I currently have? The answer came back a resounding “No”!

    If I was much younger I would leave this dead-beat soul-destroying firm at the first opportunity, but unfortunately that is not easily possible.

    There really ought to be stronger laws protecting the moral relationship of an employee with the firm he/she works for. Some of the comments my manager made about me might be considered slander.

    The business treats its staff like primary school children. It is far, far too big. Big corporations are very ill.

  40. Performance reviews can be done well if there is enough preparation done before the actual meeting of the appraisee and appraiser. Without prior due-diligence, it will result in a big waste of time. Check my notes at madhusudanrao.wordpress.com/2009/06/04/appraisals/

  41. I don’t think the problems with performace reviews are so much with the form and the process as they are with management practices. With or without appraisals, bad managers will continue to not provide continuous feedback, set goals, link individual performance goals to company strategy, and altogether avoid coaching, conflict and performance management. Performance appraisals are dreaded by most because the things I just mentioned are not being done or managers have no idea how to do them or where to start. So it think it is more of a management training program. Regardless of there being a form to complete companies need to know how they are going to link performance to pay, promotions, and performance improvement plans.

  42. Once again, I gained a resounding set of low scores on the company’s morally artificial performance measures. How can one gain a proper reputation in a firm, a career where the methods of scoring one’s work and performance are meaningless?

    Here are the kind of goals my company adopts:-

    “We aim to evolve core concepts into a set of tangible, deliverable, measurable, currency-centric services.”

    “Giving product information to customers: we will highlight our approach to provide knowledge delivery that is more precise and aligned to the customer lifecycle, conveying the right knowledge at the right time.”

    “… reaching this “end-state” aims to improve the overall customer health and experience of the organisation …”

    All of it meaningless twaddle and garble. The guys who write this kind of garbage are paid 10 times more than the production staff

  43. @jambo, why are you hanging out with guys that you despise. Really time to get on with your life.

    I’d strongly recommend you get onto YouTube, search for Dr Rao on Googletalk. Follow his advice. In a year’s time, we expect you to be happy.

    And you will owe us a drink!

  44. I think performance reviews do distract those in the work place and cause added stress when they are really unneccessary. If managers would just have good communication like a person in their position is supposed to, then they could see that there is no need for performance reviews.

  45. A ‘performance review’ is only neccessary if there is a problem that needs a frank discussion, goals to be set or box ticking. A lot of the useless, dead weight in the process could be dropped by allowing employees and managers to decide between them if it is required.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>