Jun 27, 2016 | Blog

Enough Already with the Annual Performance Reviews

Develop Your Workforce

We have to deal with it once, twice and for the lucky ones, even four times a year. It makes a small minority happy, a large majority upset, and the overall organization better off, or so the theory goes.

Yes, it’s the time of the season for performance evaluations. The nucleus of the meritocratic organization where the ‘good’ advance, the ‘challenged’ depart and the organization develops.

Now, baring my semi-sarcastic opening, the basis behind the performance management approach is sound. An objective system that rewards positive impact, provides development plans for employees, and sets clear career goals and paths that align with the company’s strategy.

It just didn’t take people into consideration.

Why we hate performance reviews?

Many employees dread performance reviews and if you secretly survey them, a vast majority would be happy to get rid of them altogether. From the prolonged administration required to fill them to the awkward conversation with the manager, and the all too often demoralizing after-effect of the review. 

It can sometimes feel like a battle of words where each side tries to twist the evidence just enough to align it with his or her narrative and desired outcome. When the metrics are up it seems like it’s not all about metrics and when they are down they overshadow everything else. It’s an argument destined to fail.

And why oh why do we constantly have to balance our feedback? You did great on this project BUT you need to do better here and there. Don't get me wrong, feedback is key to continuous improvement, but too often it feels like it's added artificially no matter what the circumstances are. Sometimes you've done a great job period. No ifs or buts.

The road to hell is paved with good intentions

But in a synthetic system of hierarchy and leveling, organizations needed to create a seemingly natural ecosystem that would appear fair, promote the worthy, and most importantly maintain the order and status quo of the organization. And that’s where the failure lies - the system is viewed primarily as an artificial protocol that supports the company and with it the many injustices that sometimes happen in the workplace. This, in turn, puts employees into two main camps:

  • the advocates - employees who prefer to turn a blind eye into the imperfections of the system and have become wired to its Pavlovian methods.
  • the indifferent - employees who see the system for what it really is, sometimes align to it but in many cases view it as a necessary evil in the corporate world.

Neither of these groups or personas are a desired outcome of performance management, and yet the process continues.

Sure, companies have dropped forced ranking and bell curves, and have put in as much manager training as possible to prevent performance bias, but the simple issue remains. Performance reviews reduce employees into numbers, even if displayed in text format.

And to make matters worse, many companies publicly announce these promotions, adding insult to the frustrated injured and forcing hypocrisy by far too many fake congratulations.

A necessary evil?

Ok, I get it. It’s not a perfect world, humans are not perfect so we can’t expect a perfect system.

Right. But with so many wrongs, why continue?

Because in order for the executives to prosper, there needs to be a layer of employees that would support the system on which they depend on. Sounds familiar? Comparable to how the rich enjoy their prosperity as long as the majority middle class accept the flaws in the system and play by the rules.

Now don’t get me wrong. I’m not calling for any revolution as I do acknowledge the imperfection of the system that are better than any alternative currently out there. But just like you can make a society better, you have a lot more leeway to do so in organizations.  And that’s what we need. Our open acknowledgment of the imperfections of the system when performing the performance reviews is what can actually make them bearable. At least until an alternative approach comes to life.

And if we’re all about teamwork and developing high-performance teams, isn't an individual based system contradictory to that? I’ve always said that the team, not the individual, is the basic unit of the organization but unfortunately the current performance management system is not supportive of that.

Leadership

So when can these system work? When they are actually made redundant. When the team communication is open and transparent enough and when the leader has his employees personal career development in his mind at all times. In those cases, these reviews are merely a bureaucratic tool for something already happening in a much more natural way.

Think we can’t do without our performance reviews? Look at Netflix and their alternative approach to performance management, leadership and HR that has received wide recognition across the Silicon Valley.

The key then is to find these ethical, professional and people leaders and help them set the right culture in place. It may not be perfect but would certainly feel more human.