SystematicHR blog points to an extremely insightful article that appeared in The Wall Street Journal (http://tinyurl.com/5j6vrt) a few months back. The author, Samuel A. Culbert , prepares a sound case for getting rid of the process of performance reviews as practiced currently in most companies.
I have myself been a critique of performance review processes because they often lead to futile outcomes and fuel employee dissatisfaction further. I have often found myself questioning the role of these reviews in boosting individual, group and company performance, but found it a little difficult to structure some of my thoughts.
Samuel says that:
The mind-sets held by the two participants in a performance review work at cross-purposes. The boss wants to discuss where performance needs to be improved, while the subordinate is focused on such small issues as compensation, job progression and career advancement. The boss is thinking about missed opportunities, skill limitations and relationships that could use enhancing, while the subordinate wants to put a best foot forward believing he or she is negotiating pay. All of this puts the participants at odds, talking past each other. At best, the discussion accomplishes nothing. More likely, it creates tensions that carry over to their everyday relationships.
Then there are second-order problems. A subordinate who objects to a characterization of faults runs the risk of adding another to the boss’s list: “defensiveness and resistance to critique.” And the boss who gets her mind turned around by a subordinate’s convincing argument runs the risk of having a bigger boss think she failed to hold the line on what had been decided and budgeted.
I too have often felt that performance appraisals have been reduced to tool for determining pay / bonus only, rather than being used effectively for its core purpose – performance management. And, Samuel feels that even pay-determination is not effectively done by appraisals.
Another bogus element is the idea that pay is a function of performance, and that the words being spoken in a performance review will affect pay. But usually they don’t. I believe pay is primarily determined by market forces, with most jobs placed in a pay range prior to an employee’s hiring.
Raises are then determined by the boss, and the boss’s boss, largely as a result of the marketplace or the budget. The performance review is simply the place where the boss comes up with a story to justify the predetermined pay.
Another element that I often think about is the issue of subjectivity vs. objectivity in appraisal process. Objectivity is possible when you have clear metrics for each role, which is not the case with many roles. And a manager’s feedback is coloured by his own world-view, perceptions, attitude, biases and agendas. Another interesting point is that performance appraisals could even act as a barrier to teamwork.
…leads to inauthentic behavior, daily deception and a ubiquitous need for subordinates to spin all facts and viewpoints in directions they believe the boss will find pleasing. It defeats any chance that the boss will hear what subordinates actually think.
To me, it appears that it is time for re-imagining the entire process of performance reviews. How do you think we could go about it?