Performance reviews pack problems

Some companies have forgone them. Better strategy is to focus on talking more often.

It’s no secret that the annual employee evaluation drill is dreaded and disliked and coughs up disparate results depending more on the evaluator than the employee being assessed.

And it’s not just employees who wish they would evaporate (the reviews, not the evaluators).

Most assessment administrators – who should be verbalizing feedback throughout the year – also rue the time that formal appraisals take. And there’s not much evidence that formulaic performance reviews actually improve performance.

Small wonder that companies as noted as General Electric, IBM and Microsoft have decided to round file the practice as ineffective.

Ben Haimowitz, who does a great job of calling my attention to studies published by the Academy of Management, recently pointed me to a report by researchers from the London School of Economics and Political Science, the University of Toulouse and the Warwick Business School.

The academic jargon can get pretty dense, but the gist of the study, based on interviews with a sample of evaluators, was that most “seem to have been unaware of the real policies they used” to write evaluations.

And when asked to rank the factors they used to evaluate employees, “their answers were at variance with their actual judgments,” the research team reported. Furthermore, the study found a “lack of consensus about which factors make for fairness.”

My short recap here does scant justice to the in-depth, global scope of the research, but even in a sound bite it contributes to the growing body of research that exposes the inherently flawed and futile attempt to drive orga- nizational performance through a formal appraisal process.

Other studies have found that negative reviews don’t necessarily encourage performance improvement as much as they generate ill will and make workers less likely to strive to be better and more likely to leave the organization.

None of this is to say that the fault totally lies with managers who have to play by the appraisal rules set down by their organizations. Most undoubtedly take time and care to produce reviews designed to help, not hurt, their employees.

Acknowledge, too, that some employees are not interested in doing better and not interested in what their bosses think about them. Such is human nature. It’s best if those workers depart of their own volition rather than drag out a “failure to meet expectations” and due process before they’re fired.

Given that the ideal can be elusive in the real world, the often-repeated best-practice advice is to talk to each other. Talk often, not just when a periodic evaluation is shared. Listen to each other. Understand each other’s performance drivers and try to find common ground.

And if perceptions are too far apart, workers should look for a new job. It’s hard to alter an established belief.

ISTOCK The performance review sometimes doesn’t benefit anyone involved.