The pros and cons of performance reviews and how to make them better
Raise your hand if you dread your annual performance evaluation. Okay, stop waving your arm around; I see you! I hear you! I feel your pain!
If you’re like most people, having someone judge your performance is nerve-wracking! Although most people agree there is some value in performance reviews, most would gladly skip them altogether if given the choice.
Supervisors and managers dislike them just as much as their staff. They’re usually time-consuming to prepare for, conduct, and document. They also involve the delicate balance of positive reinforcement with constructive feedback, which many bosses haven’t had the opportunity to learn how to manage.
What if you could avoid stressing out your staff and yourself and turn evaluations into an enjoyable experience where you learn more about each other and grow professionally?
Read on to learn how to end the problems with typical performance evaluation systems while still managing to hold onto the advantages!
As an HR professional, I’ve attended evaluation meetings to coach supervisors and managers. Typically, the amount of tension in the room is palpable. Both people struggle to articulate their thoughts and feelings, but in the end, they simply read what they wrote on the form.
So, why do we bother?
Performance reviews have been a management tool in the U.S. for well over 100 years, and for good reason. The document, usually accompanied by a meeting, can be an effective tool for giving feedback and coaching to improve an individual’s performance and positive impact on the company and also to enhance career growth potential.
Here are a handful of reasons to conduct formal performance appraisals:
- It’s an opportunity to praise people so they keep doing the stuff that’s working.
- You can make sure people feel valued for their contribution.
- It’s a chance to carve out focused time to discuss what’s working (and not working) from both people’s perspectives.
- It gives the employee a chance to adjust things that aren’t working so they don’t escalate into disciplinary issues.
- Training and development needs can be explored.
- You can unearth issues that are getting in the way of peak performance that you are unaware of.
- It’s a wonderful time to make sure there is alignment between the individual’s and the manager’s goals, as well as the organization’s vision.
I’m sure I’m missing a few, but you get the point – a lot of good stuff can happen in a well-facilitated performance evaluation meeting.
But for all their strengths, performance evaluations, as they are typically conducted, can have negative side effects.
Below are some of the drawbacks of performance appraisals:
1.Reduced productivity as the meeting draws closer.
The degree of and reason for this varies by person. It’s caused by anxiety about whether the feedback will be negative, how to respond, and fear of a low score and corresponding inadequate raise.
The formal tone of the meeting with signatures and documents placed in the employment file isn’t helpful in allaying fears. In general, most people have a general discomfort because the performance evaluation meeting gives the feeling of being judged and cross-examined in a courtroom!
2. Failure to focus on the right things.
if the system isn’t well designed, supervisors and employees may spend time focused on aspects of the job or competencies that aren’t the key drivers of high performance for the organization.
When pay is tied to performance evaluation scores, people will argue for a higher score more fervently to get a bigger raise or even subconsciously rate their performance higher to maximize their earning potential.
3. Time-consuming documentation.
I’ve heard this complaint about even the most basic performance evaluation systems. I think this is a legitimate complaint in overly complex systems, but in the case of simple ones, this is the overworked manager’s cry for help!
4. Legal risks.
While performance evaluations are often considered a tool for formally documenting performance issues as protection against wrongful discharge and discrimination claims, often they end up documenting managers’ missteps and lead to increased legal risk.
5. Lack of information to accurately evaluate.
The supervisor or manager isn’t always the best person to provide feedback because they don’t work with the person daily. Some systems attempt to remedy this by having other people give input, but the ultimate provider of the information and final rating decision-maker is the manager.
6. Individual biases.
We’re all human and see the world through our unique perspectives. Some people are harder raters, while some are more lenient.
Some supervisors don’t care for particular employees for reasons that have nothing to do with their performance. Without proper training and development, they’ll unintentionally bring those biases into the performance evaluation process.
A Better Way
Finding a way to get the benefits of performance evaluations without the drawbacks involves piecing apart the reasons for conducting an evaluation and questioning not only how you are going at it, but also why.
The best resource I have found on this topic is the research and writing of Tom Coens and Mary Jenkins in their book Abolishing Performance Appraisals: Why They Backfire and What to Do Instead. Although written 17 years ago, it’s just as relevant today as it was then.
The takeaway message of the book is that organizations are typically trying to take care of a half-dozen or so management functions with a single tool – performance appraisals. We want it to cover our butts from a legal standpoint, expect it to tell us how much of a pay raise someone should get, guide us on who should be promoted, tell us who should be let go during a layoff, etc.
The belief that one instrument can effectively do all these things well is unrealistic and the reason for the pitfalls.
Consider Changing Your Approach
Here are some things I’ve tried that have led to remarkable success! I encourage you to resist a “that won’t work” reaction and instead play around with the ideas for a while.
1.Disconnect pay from evaluations.
It’s hard for people to be honest about their weaknesses, ask for help, and identify areas for training and development if they’re trying to get an “A” on their report card to get the biggest raise possible.
By limiting the role of evaluations to coaching and development and setting base pay and regular raises that ensure competitive pay, you set the stage for an open, productive exchange.
2. No surprises.
Have regular, honest feedback sessions – monthly is ideal.
Also, increase your comfort level with pointing out the bad and good behaviors as they happen rather than saving them for the next meeting. By giving feedback in the moment, you give the person the opportunity to reflect on what just happened.
A person can more accurately and precisely recall what they were thinking and feeling in the moment and why they did what they did. If you wait, you reduce their ability to learn from their mistakes.
3. On-going versus one time.
This goes hand-in-hand with #2. The most effective feedback is continual. Some organizations have chosen to drop performance evaluations altogether in exchange for on-going, real-time feedback.
Doing so removes the administration of a full-scale system and removes the manager’s crutch of an evaluation meeting in which they give a whole year’s worth of feedback rather than the more effective in-the-moment information sharing.
However, given that supervisors and managers are rarely trained and skilled at giving feedback on a regular basis, this may not be the best way to go. Which brings us to #4….
4. Build a culture of feedback.
To create a culture that values continual, performance-enhancing feedback in an entire company or within a department or division, people must have the knowledge and skills to do it effectively.
The good news is that it is learnable. Invest the necessary time and money to increase the aptitude of yourself and your team at both giving and receiving feedback.
Whether or not you use a formal performance evaluation system, remember that it’s your obligation to give meaningful feedback to employees, to ask them what they need to succeed, and to coach them to their highest potential.
By learning to do this effectively, you expand your influence, improve the results of your organization, and grow your career.
Noodle Over it a Bit & Join the Conversation!
What pros and cons to performance evaluations have you personally experienced?
You can leave your answer in a comment below.
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