What’s to Be Done About Performance Reviews?
What can we do to make performance reviews more productive and less distasteful? Should their objectives be scaled back to just one or two? Should they be disengaged from the determination of compensation and, if so, how?
The topic of performance reviews triggers a wide range of complex responses. The fact that most of their strongest critics elected to reply anonymously to this month's column suggests that there are also political overtones to the subject. This month's debate was much like a case discussion, one that is often hard to summarize. But in an attempt to do it, here is my "take" on what you have said collectively.
Everyone sensed the imperfections in performance reviews and the difficulty of discussing them without knowing the objectives they seek to meet. In Bob Handwerk's words, "The 'pain'… of conducting performance reviews is associated with … a lack of clear mutual (management and employee) understanding of their purpose." At the heart of this concern was whether they are intended primarily to benefit the organization or the individual. Jon Clemens, for example, argued that the "purpose of reviews should be to drive better business results for the organization … making sure that the daily efforts of employees directly contribute to both their team's goals and the goals of the organization." In contrast, Deepak Alse commented, "Performance is the other side of personal development." Abbey Mutumba said, "It is better to refer to performance appraisal/reviews as 'personal development reviews' to make the process (fit) more strategically … with overall organizational performance goals and objectives."
There were many suggestions for how to improve them. Typical of these were Thad Juszczak's recommendation that "The process of performance feedback should be continuous." Continuous feedback is an antidote to Hany Derias' concern that "the one thing that performance evaluations should not be is a 'surprise.'" Terry Ott suggested, "performance reviews should be but one part of a continuous loop of planning, coaching, providing spontaneous feedback …." "Much of the problem," according to Rowland Freeman, "is the lack of training for reviewers. They are more concerned with the interview than the interviewee." According to Wally Bock, "When I conducted research … I found that … the more effective supervisors spent the bulk of their performance evaluation meeting time talking about the future."
Forced ranking as one technique for quantifying performance appraisal received mixed reviews. Tery Tennant's opinion is that "forced ranking is injecting fear into the workplace." But as Nauman Faridi put it, "Ranking … must be handled delicately …. Organizations must first improve their performance culture or else they will only make their system worse."
Dean Turner expressed the frustrations of many when he said, "What's the best system? After 40+ years in the work force, I am still searching for it." By way of contrast, Richard Tiedeman commented, "Almost any system would work if organizations truly fostered an environment of continuous feedback." What do you think?
It's the season for many employee performance reviews. Why do they seem to rank alongside root canal dental work on our list of things we look forward to as managers and employees? And what are we doing about it?
If we assume that the basic purpose of employee evaluations is to build better-performing organizations, then this has to be one of the most important things we do as managers. But if formal evaluations weren't required, would we even provide them?
Much of this season's debate has centered around whether a forced ranking system works in such efforts. It was given visibility by its adoption at GE several years ago, where managers were forced to identify their direct reports in three categories on a "vitality curve": the top 20 percent, the "vital" 70 percent, and the bottom 10 percent. (Perhaps not entirely coincidentally, these are the de facto percentages used in the forced ranking system for students in required courses at this institution.) Although the system has been modified somewhat in its application, it still triggers advice to those being ranked, especially those in the bottom category who may be given help or advised to leave the organization.
Proponents of forced ranking claim that it is more humane and effective than most qualitative systems for employee appraisal in which employees don't receive frank appraisals because managers are not able or willing to give them. This helps avert surprises, or worse, lawsuits, when poorly-performing employees are fired. Opponents claim that it hurts such things as teamwork and innovation. What little research there is on forced ranking systems suggests that they produce a short-term improvement in performance that soon levels out, perhaps because the worst performers are weeded out in a timely fashion.
Perhaps a more important issue is the objective of the review itself. Is it to weed out poor performers? To recognize the so-called A players? To provide the basis for compensation decisions? To provide clues to future opportunity within the organization? To map out an individual plan for personal development? All of these? Too often this is unclear. Is it any wonder then that managers, many of whom receive little or no training in how to do it, conduct the task of reviewing performance so poorly?
The questions all of this brings to mind include: What can we do to make performance reviews more productive and less distasteful? Should their objectives be scaled back to just one or two? Should they be disengaged from the determination of compensation and, if so, how? As managers, should we invest time to keep a day-to-day scorecard on individual qualitative and quantitative performance and feed back impressions to employees on an ongoing basis? Should periodic performance reviews be relatively incidental as opposed to regular coaching "in the moment"? (After all, aren't we all teachers?) Should less emphasis be placed on looking backward and more on how to improve future performance? Should the process be renamed and redesigned as a "personal development review"? Should we put aside "forced ratings"? Just where does the process fit in building organizational performance? What do you think?