In our office, it’s nearing the end of the fiscal year and that means performance reviews. The annual performance review was completely redesigned this year. In addition, there has been a huge push from above to make sure many more employees averaged close to a “3” in a 1-5 performance scale. Due to these changes, there was a lot of general confusion about what was expected of each employee for their personal review as well as what to expect at one-on-one reviews with supervisors. These changes ultimately had little to no effect on raise decisions; however while speaking with colleagues, it became obvious that the cumulative effect of these changes was a destruction of morale and trust that had nothing to do with money.
Destruction of morale is just a small part of the damage a performance review might have on an organization. An article in the Wall Street Journal discusses several reasons why performance reviews, as they are commonly structured, are damaging and ill-advised. A few of these reasons are detailed below:
1. The boss and subordinate have two different mindsets walking into a review. The boss wants to talk about “skill limitations and relationships,” while the subordinate wants to negotiate a raise. At best, this discussion accomplishes nothing but, the author states, it more likely causes ill-will between the two people that has far reaching problems in day-to-day life.
2. There’s a widely held belief that performance determines pay; however raises are generally determined by the yearly budget and the overall economy and marketplace. The performance review often turns into a thinly-veiled justification for the raise the employee will receive, good or bad.
3. Performance reviews are generally set up to appear “objective” but because a single person is reviewing a number of people, the assessment cannot be free of the bias, motives, and feelings of the reviewer at that moment.
4. This same boss who must review a number of people simultaneously might be comparing very different people with sometimes very different job responsibilities but holding them all to the same criteria. For example, a trait that might be seen as an asset in one instance or by one reviewer could be seen as an impediment in a different situation or by a different reviewer. Similarly, two different employees may have two different ways to get a job done. Although both employees might achieve the same outcome, the boss may agree with one methodology and rate one person higher than the other. Unfortunately, this rating has little to do with actual performance.
5. Reviews in general impede personal development. If employees need help, they’re often afraid to speak to their bosses. Employees may feel that by acknowledging that there is a gap in their ability or knowledge, bosses will see that in a negative light and will decrease their potential raises for the upcoming year. Therefore, people do not grow as employees because they fear the retribution from asking questions.
Performance reviews seem to be a necessary evil but do they have to be? Perhaps there are alternatives to the performance review. The writer of the WSJ article focuses on addressing reviews as a team endeavor between the boss and subordinate and not as an adversarial experience in which both players enter the discussion on the defensive. He defines these meetings as “previews” instead of “reviews” in which both the boss and subordinate assess each other and when there is a problem with their teamwork, both members of the team must discuss and work to fix the problem at hand. The hope is that perhaps these changes lead to a more productive and healthy work environment and less game-playing and morale destruction.
What would you suggest reviews be replaced with?