Posted by: A.R. Cherian | October 1, 2009

Get Rid of Performance Reviews

The idea in the title comes from a provocative opinion piece by Samuel A. Culbert of the Wall Street Journal. I think it is a rather eye-opening piece and worth a read by everyone interested. It is more about reforming the current PE system rather than getting rid of it altogether. Culbert lists seven major problems with the current system and proposes a remedy.

One idea that I agree with is that performance reviews are anything but objective. They are always written by your immediate or one-up boss who sees your work and your relationship with them through their own “set of glasses.” Even incorporating others to write the performance review will yield many different irreconcilable opinions. As Culbert mentions, if it was truly objective, then why do the reviews change significantly when people start working for another boss in the same company?

I also wholeheartedly agree that managers have to create a safe environment where employees can approach them for help and support. As Culbert writes, why is it that most employees do not go to their managers first for training and improvement? He believes its because it would come back to haunt them in their performance review. That is a justified fear with the current system.

It has been found from research studies and surveys that one of the top reasons why people stay at a job is because of their relationship with their immediate supervisor. Culbert writes that the performance evaluation undermines that important relationship. This is a valid point.

I think the main problem is that most companies directly tie-in the results of the performance review with raises and bonuses. Lessen this relationship, and I think true dialogue between manager and employee can take places as to what it is they can improve and get training on.

checklist

Lastly, I agree that more managers have to consider their employees as part of their “team.” The employees success will always lead the boss to be successful. They should be held accountable together. Therefore, it should be in their best interest to dialogue effectively on how they can perform better together.

I’m glad that in my previous place of employment, they did not regard performance evaluations very highly. It wasn’t tied into pay unless there were glaring problems. Pay was based directly on industry and market rates. This helped create an environment where the performance evaluations weren’t as feared and led to above-average dialogue between boss and employees on what could be improved. Of course, this system was not perfect. It still had more of the boss telling the employee what they could do better as any other PE system. Employees still had the fear about telling the boss what they could improve upon as well. However, this was still better than the traditional PE process in a lot of companies because of the reduced tie-in with compensation, raises, and bonuses. I think a respectful two-way dialoguing process without fear of drastic repercussions as Culbert proposes is beneficial for any organization, and especially the manger-employee work unit.

I agree that performance evaluations have to be reformed from the way they are now. The current motivation for employees is to “please the boss” so that their performance review is good.  Changing this ubiquitous system is going to be a hard battle because it is so ingrained in corporate culture. But if more managers can think through its problems and implications, I think they can make such improvement suggestions in their companies and bring about incremental beneficial changes to this system in their organizations.

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