Annual performance reviews can be counterproductive

  • By Eric Zoeckler
  • Sunday, November 6, 2005 9:00pm
  • Business

There is one event that remains among the most feared and loathed in today’s workplace. It’s hated by employees and bosses alike. It’s less popular than spoiled food in the lunchroom fridge.

Of course, we refer to performance reviews, also known as performance appraisals, annual reviews or employee-manager social hours (I made that up).

Try naming someone who doesn’t have a performance review horror story – like the insurance company analyst who discovers during his annual review that his boss considered his monthly and quarterly reports inadequate. “I didn’t have time to tell you,” the boss said.

Other performance review nightmares include supervisors who confuse one employee for another, companies that assign percentage quotas for good and bad reviews, and managers who use software programs to write reviews, hoping nobody will notice.

If this sounds suspiciously like your organization, you’re not alone. While 78 percent of companies routinely conduct annual performance reviews, only 26 percent of surveyed workers said managers routinely provide constructive feedback and/or coaching.

A late 1990s survey of more than 1,700 human resource professionals found only 5 percent were “very satisfied” with their review process.

That’s why the performance review process as most companies practice it should be eliminated, said Christopher Lee, director of human resources at Bates College in Maine and a recognized human resources researcher, analyst and author.

Instead of forcing what he calls the annual “employee-manager confrontation,” replace it with a series of relaxed, periodic “conversations” that cover both the employee and manager’s performances, expectations and visions, he told a human resource conference this summer.

Lee’s thinking dovetails with other human resource experts who have studied the performance review phenomenon. In their 2001 book, “Abolishing Performance Appraisals,” Tom Coens and Mary Jenkins argue that annual reviews do little to improve employee job performance.

Because of their stiff and formal nature, annual evaluations promote conflict, anxiety and fear and put employees on the defensive, Coens, a Michigan labor lawyer, said in an interview with the Newhouse News Service. “Employees would rather their bosses take them out for coffee than get what amounts to an annual report card.”

Lee agrees, but warns getting companies to change will be slow and difficult.

The performance review system is a late 20th-century outgrowth of an industrial age model that generates reports on the performances of plant machinery.

Yet, as people, employees are the antithesis of machinery, and it’s not easy to judge them fairly by numerical measures, he said. But limiting reviews to annual events, and in most cases judging the employee by a numerical rating or a written analysis, “seems to elevate differences” and makes them confrontationally similar to lawsuits or labor disputes.

“How do we get to the point where we have a true dialog between employee and supervisor about the work that is done everyday?” Lee wonders.

Get there by insisting that managers supervise, not hide in their offices or attend meeting after meeting. “The ideal is when the employee and the supervisor ‘co-perform’ to help the employee achieve the very best performance possible,” Lee said.

That means having periodic (at least six) informal meetings annually in the office, over lunch or coffee, he said. The talk at these meetings must be free and go both ways. The manager must encourage and listen to what the employee says about how they are managed, Lee said, just as the employee must be prepared to hear the boss’s view of how they performed.

“The employees are there 100 percent of the time, and they certainly have insights on how they performed,” Lee said. Unfortunately, they are usually not invited by managers to self-evaluate themselves or the manager.

“The sports world is replete with examples of how a talented but underperforming player is sent to a new team (and new manager) and flourishes into an all-star,” Lee said. That usually happens because the player and the new manager click, so that the player feeds off constructive observations from his new supervisor.

Most of all, Lee said, “employees just want feedback, they want it often, and they want it straight.” If they are messing up, they want to be told; if they are excelling and reaching goals, they want to be told.

Peter Drucker, considered the founder of progressive management, urged managers to treat employees as if they were volunteers.

“In fact,” Lee said, “employees are volunteers; by showing up every day, they are volunteering their commitment to you and your organization and they deserve some quality oversight by their managers in return.”

Write Eric Zoeckler, c/o The Herald, P.O. Box 930, Everett, WA 98206 or e-mail mrscribe@aol.com.

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