Thank you, Amy, for submitting this piece.  It is a wild one.

Have a look at this article.  It is long, but I have captured some excerpts below and made some comments.  I would be very interested in reading yours. The link is:

http://www.npr.org/templates/story/story.php?storyId=128362511&sc=nl&cc=es-20100711

Employee performance reviews should be eliminated, according to UCLA business professor Samuel Culbert. “First, they’re dishonest and fraudulent. And second, they’re just plain bad management,” he says.

Periodic reviews create circumstances that help neither the employee nor the company to improve. As Culbert and his co-author, Larry Rout, write in their book, Get Rid of the Performance Review! annual reviews do not promote candid discussions about problems in the workplace — and their potential solutions.

I cannot speak to whether performance reviews are truly “fraudulent”.  That has never been my observation, but I do not know on what grounds the author is making that assertion.  My observation is that performance reviews are not effective because they are poorly prepared and executed.  This seems to be a chronic problem in organizations, and I do not think that it is because the concept is wrong.  I think it is because the practice is flawed.  It seems that the process generally lacks leadership commitment requiring it to be done well, and it lacks rigor in how it is actually performed. 

• Management does not make it clear that performance review is fundamental to the success of the business. 
• Management often does not require that the basics are in place to enable that to happen, i.e., they do not oversee the process to ensure that job descriptions and goals exist and are clear and accurate. 
• Management does not do an adequate post mortem of the process to evaluate how well and completely it was conducted, and to determine how to make it better in the future.

Many organizations I have seen have a decent approach for defining job roles and responsibilities, and setting goals for the year.  However, the process often seems to fall apart in the measurement of performance against those goals, and the discussion or feedback about that performance.  Often, managers do not clearly define what the expectation is or how it will be measured.  When the time comes to evaluate performance they have to come up with that way of measuring it, if they even do that at all.  When it is done it is often done after the fact by the manager and comes as a surprise to the employee.  In addition, managers often do not take the time to collect all the relevant information to do an adequate job of really measuring performance.  As a result, the performance review discussion is flawed.

Further, the discussion itself often becomes combative.  Managers are frequently not well trained in conducting effective conversations about performance.  As a result, individuals feel personally attacked and the opportunity for constructive discussion is lost.  See the link http://www.scottneilson.com/?p=391 for our previous post on Feedback.

The author Culbert goes on to say that “The boss already has heard [from] his boss what they want to pay the guy, or the woman. So they come up with a review that’s all backwards.”

Unfortunately, I have to agree with some aspects of this point.  I have experienced many times when performance charts are force fitted to comply with a pre-determined pay raise amount.  Having said that, in my experience it is an overall amount that must be distributed based on what the company can afford, not based on an individual.  The manager’s task is then to manage that pool of salary increase funding as best they can to make it as equitable as possible.  In all honesty, I cannot say that that is inappropriate.  The business can afford what it can afford.  Now, one may certainly take umbrage with what that amount is and how it is determined, but it is not at all unusual, nor inappropriate, for businesses to know how much they can afford to give in pay raises and to determine a pool of funding from which to distribute those raises.

This aspect also is connected to how the organization wants to strategically position themselves from a pay perspective.  Some organizations intentionally do NOT want to be at the high end of the pay scale.  They do not mind the fact that they will lose some of their best employees to competitors who are willing to pay top dollar for top performance.

Finally, forcing a percentage increase to be distributed across an employee base does require managers to distinguish between employees who are performing and those who are not.  This is an area in which managers are notoriously weak.  It is distasteful for many to have to do this and so, given the opportunity to by-pass that responsibility, they will take the easy way and give everyone a good rating and pay raise, which defeats the purpose of pay for performance.  This approach does require them to make some effort to distinguish between good and poor performers.

Asked if performance reviews might be tweaked instead of eliminated outright — for instance, a manager might use statistics to measure an employee’s effectiveness — Culbert says that one-dimensional measurements can bring a new set of problems.

“Once you set up the metrics, that’s the only focus for the employee,” Culbert says. “The problem with performance reviews is that the metric that counts most for the employee is the boss’s opinion. So the employee starts doing what he or she thinks is going to score in the boss’s mind, and not even talk about what he or she believes is necessary for the company to get the results that really matter.”

Yes, this is likely to happen.  One performance measure is unlikely to result in strong overall performance of the business.  However, I will come back to my previous assertion that this is a result of poor execution, not bad concept.  There are models for elementary approaches such as Balanced Scorecard which are designed to address the fact that there are many aspects which must be performed well and will be measured.  They just have to be used and executed properly.

How could something so obviously destructive, so universally despised, continue to plague our workplaces?

• In part it’s because the performance review is all executives have ever known, and they’re blind to the damage caused by it.
• In part it’s because few managers are aware of their addiction to the fear that reviews create amongst staff, and too many lack the confidence that they can lead without that fear.
• In part it’s because HR professionals exploit the performance review to provide them a power base they don’t deserve.
• And in part it’s because few people know an alternative for getting the control, accountability, and employee development that reviews supposedly produce—but never do.

This I do not agree with, especially about HR professionals using it to “provide them a power base they don’t deserve.”  Again, I think that the concept of performance review is correct.  It is the execution that is flawed.

Reviewing performance is good; it should happen every day. But employees need evaluations they can believe.

Agree here…again, refer to the post on Feedback link: http://www.scottneilson.com/?p=391

 

…the alleged purpose of performance reviews is to enlighten subordinates about what they should be doing better, the real purpose is intimidation aimed at preserving the boss’s authority and domination in relationships. 

No, not buying that one.  While it probably does exist, I would not make the blanket statement that the “real purpose” of performance reviews is intimidation and preserving the boss’s authority and domination.

To me, the problem boils down to one word: insecurity (although incompetence comes in a close second). Too many managers relish the authority they have—and fear losing it. They worry they won’t be able to persuade their direct reports to do things their way. So they get their self-confidence the only way they know that the current corporate structure allows—by intimidating their subordinates into silent compliance. In other words, they scare the hell out of them.

Personally, my observation has been that organizations do not do a good job of training their managers to manage.  That includes many aspects, such as organization design (to match the key processes of the business with the desired outcomes), job definition and description (to provide clarity to the individuals about who is doing what to get there), and performance management (to enable effective and constructive discussions to take place to enable individuals to see where they are hitting the mark and where they are missing it in the daily performance of their jobs).

I would love to hear your thoughts on this.  Please reply right to the blog rather than emailing me with your thoughts