Whether you call it a performance appraisal, performance evaluation or performance review, it’s a 20th Century concept that should have been abandoned by the change of the millennium. Managers hate writing them and delivering them and employees dread receiving them. So, why do we continue giving them and thinking they are important? I’m here to tell you, it is time to dump the annual performance review.
Companies and consultants have made millions tweaking and attempting to reinvent an inherently flawed process that was started about a century ago as a way of identifying who receives a salary increase and by how much. They are also used to justify why someone receives a promotion. Over the years, this performance management tool has been decoupled from the salary increase in many organizations, but they persist as a way of measuring performance.
Before I dive into the myriad problems I see with the annual review system, I will identify the benefits of having an evaluation system. First, for employees to know if they are doing a good job, they need feedback. They need feedback to grow, and they need feedback to see if their perception of their work quality is in line with that of their manager or peers. All of these are good things about having a structured process.
The annual review is intended to do all the above as well as to be a coaching session to discuss future goals and expectations. Although it was a new concept in the early 1900s, it wasn’t that revolutionary. It was very much designed after the “report card” that was given by teachers to evaluate students. Instead of a grade of A–F the rating became a scale of 1–5 (or 1–10). Instead of a category like “Gets along well with others,” it changed to “Maintains positive relationships with colleagues.” Additionally, many companies rank employees in relation to the other employees, very similar to the class rankings in school. One major difference between the annual performance review and the elementary and secondary school grading system, is frequency. Students are given more frequent feedback.
My list of 10 problems with annual performance evaluations:
With all the negatives about performance reviews, why do they endure? They have certainly been revisited by many consulting companies and academics. They have been massaged and manipulated and even forgotten from time-to-time. What has not happened in most companies, is a decision to eliminate them.
When managers are doing a thorough job with the review, they could spend over two hours to write a performance appraisal on each employee. If they aren't taking that time, they often give just superficial feedback. Either the manager takes thorough notes throughout the year, has an exceptional memory, or the feedback is given based on one or two events or an overall impression the manager has of the employee.
Some managers have employees do their own performance reviews. This could be used to provide feedback and gain and understand the similarities and gaps between the perceived performance. It can also be helpful for the manager who is not keeping track of everything their employees are doing. But it should not be an easy way out for the supervisor to use the employee’s self-appraisal to craft the employee’s performance evaluation.
As companies are moving toward having more remote workers and flexible work schedules, it makes sense to eliminate performance evaluations and replace them with weekly check-ins or KPIs and monthly or at a minimum quarterly reports.
The check-in consists of the goals to be accomplished for that week and how they did on last week’s goals. This could be sent to you or completed in a one-on-one. It shouldn’t be cumbersome for either of you. The monthly report would be a summary of what was accomplished that month. Key accomplishments outside of the goals can be added. These become an ongoing accurate record of the employee’s progress. You can then offer kudos, public announcements of “above-and-beyond.” This type of process is more motivating than the annual review, provides more direction, provides more opportunity for feedback, and gives an accurate picture of an individual’s performance and performance patterns.
In summary, dump your performance appraisals. Create weekly goals. Have weekly review of progress toward the goals. Do away with ratings, rankings, and numbers. Have the employee do a monthly report sharing key accomplishments, which will include both their goal accomplishments and things they did above and beyond.
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