Employee Performance Reviews Do More Harm Than Good
jacksonfish.com
jacksonfish.com
I think if more employers looked at it this way, and were more casual and open about the whole process, it would be a lot more beneficial to their companies.
Where I work the annual review looks at those above, below, and beside you and doing that several times a year is far to time consuming. IMO, the trick is managing the less formal feedback and using that as part of the formal review. Which is why your manager does not create your review. They might be biased by something from last week but your coworkers tend to think back to the important projects over the year.
I think this view is unnecessarily extreme. I think the correct way it should have been presented is that performance reviews should be done in a more useful way. Not all performance reviews are for the purpose of rationalizing bonuses. I think feedback on one's performance accompanied with goal setting of specific behaviors is fundamental in sustaining good work and motivation in employees.
I do think that ranking employees doesn't work most of the time because it not only creates competition but discourages those who have been performing well, but just not so much as others who could potentially be ass-kissers as what the article says.
The bottom line is that , w/o a review/feedback on your on-going performance, you wouldn't have an idea of what you should work towards to and u cant assume that all employees are intrinsically motivated to do better.
Heuristically, people lose their sense of engagement about 5 months after they are hired and this can keep deteriorating if immediate supervisors don't provide the support/encouragement/feedback.
One last thing, research has repeatedly shown that regular performance feedback increases motivation and performance in the long-run. what's important really is how the feedback is given.
And to be clear, I never said that regular consistent performance feedback was bad. I said that the annual performance review was not a substitute for it.
The entire ratings system is ripe to be exploited by people who know how to play the game. This is especially bad if non-technical people are reviewing technical people. I had to witness the worst developer on my team become the highest paid because he knew how to sell himself and could speak a language that upper management understood.
I'm more in favor of (arguably) less subjective methods of determining an employees worth (like Bioware's RPG style ratings, or Joel Spolsky's ladder). There's still room for person bias, but at least there's less room.
Hear, hear. There is nothing more maddening than having someone dumber than you tell you that you're dumb once a year.
And yet HE is the one who evaluates OUR performance... making the entire process a waste of time.
To top it off, he isn't even honest in his reviews... as far as I can tell it's all politics for him, basically doing anything he can to shift blame down from him onto us.
It's also a good argument for including discussions with your boss's boss in your review, to avoid a poor but politically savvy manager being able to competely filter feedback from everyone below them to the higher-ups who could do something about that poor manager in the middle.
One useful strategy we've had is to do 90 day (quarterly) quickie evaluations followed by a formal, but succinct, annual review. If both parties are doing their jobs, "pathway/goal" guidance given informally during the quarterly process and throughout the year should lead to very little surprises in the annual review.
At the same time you can use performance review to your own advantage, how? well you can easily identify whether your manager is just a good manager or GREAT manager - Good managers help their employees succeed in whatever role they happen to be in. Great managers see the unique talents of each employee, and then create the role that's a perfect vehicle for those talents. Great managers remove the obstacles that prevent their employees from unleashing their talent. And they make sure each employee has the right opportunities, the right stage, the right audience, to be fully appreciated.
I talk to everyone on my team 3 times a year to make sure I'm giving them what they need from me and vice versa. The informal manner helps in keeping the whole process relaxed and the feedback genuine. The 4 month period in between gives ample time to improve things without stretching it out for a whole year. Iterate, get feedback, iterate, get feedback. It works for startup business plans so why wouldn't it work for self development?
I have seen employees who have performed well all year get demolished by a performance review where they were rated a "3" or "4" out of "5" because HR required only one "5" per department and two or three "4"s, and expect the majority of employees to be a "3". (Thankfully, they didn't require that each department designate a "1" goat.)
That being said, I have found that performance reviews that focus on how the employee has improved the business and seized opportunities (or not) and focus less on artificial competition are extremely beneficial.
Tightly coupling salary/bonuses to performance reviews with this type of system is a disaster.
Unfortunately, my experience is that most managers in such a system lack the insight to minimize the effect on employees. Maybe when you're talking about minimizing the effect of telling an employee they are (non-deservedly) one of the "3" performers, you've already lost the battle . . . Add in the inevitable weird corporate culture stuff "you are a '3' because you got promoted this year, it's just your turn in the box" and you have a perfect recipe for draining motivation away from employees.
It seems that the socialist (not tarring, just naming) approach to granting team raises is a powerful attraction to low performers.
In a small startup, with relatively little money to throw around, it probably doesn't matter and eliminating them may actually be a net win. Once the company reaches the 500+ person mark, failing to recognize ($$) individual achievement just demotivates and chases away those who would be your stars.
Even if a genius developer produces a brilliant implementation of new feature quickly and with a low bug count, someone had the idea for that feature and worked out how it was going to integrate with other features, many people probably wrote a load of other code the feature depends on even if that code didn't itself create the same buzz, people were involved in testing the feature, producing the marketing, and on and on. While everyone might agree that the genius developer had done a good job for the team, how can you say quantitatively and objectively what his contribution was? 10%? 25%? 90%?
In contrast, the success of a project team is generally fairly easy to quantify: divide the cost of running the team by the amount of revenue generated by the projects they produce.
The sad reality is that while serious guru developers may indeed be an order of magnitude more productive than average, and some at the other end of the scale are actually counterproductive, salaries for employees will never realistically reflect this. The bottom-feeders always get more than they deserve, while the top guys will never get credit proportionate to their contribution. After all, this is why many of us get out and go freelance or start our own businesses.
But within that reality, I can't help wondering whether the guys at the top would still rather work with a motivated team than be individually slightly better compensated but surrounding by jealous, bitter colleagues.
In my past experience, even at employers where everyone to the last employee was totally qualified, there was general consensus about who the top, distinguished cohort was, and to the extent that people were jealous or bitter, it centered around the fact that those people were better, not around the fact that they got paid more.
Even if nothing in a mid-sized company is truly done by individuals, I know the handful of employees that would really hurt to lose and the buckets full where we would be perhaps genuinely sad to see them go and wish them well in their next endeavor, but that I wouldn't lose much sleep over it. Survey 10 high-level managers, and the lists would line up pretty well I imagine. If that's the case in your org, and you aren't making damn sure that pay, within fairly BROAD bounds, isn't going to be a reason for the stars to walk, you're doing it wrong IMO.