Ever had the sneaking suspicion that you are in fact above average? You are not alone. According to technology company Atlassian, most people believe they are performing better than the average Joe. This statistical impossibility is just one reason why Atlassian dumped its traditional annual performance review and scoring system. It found people were arguing about whether they really deserved a three out of five, instead of focusing on getting better at their job.
These days even people with realistic perceptions of their abilities run the risk of being disappointed by their score in a performance review as companies increasingly embrace forced ranking and managers worry about how they are going to distribute cash from shallow bonus pools.
If performance reviews achieved great things then they would be worth the angst, time and cost involved. But cast your mind back over the time you’ve spent scribbling into a generic form about your strengths, achievements and areas for improvement, discussing this with your boss and making up a to-do list that you might never have looked at again. Regardless of whether you were labelled a star or something less glittering, can you honestly say that the time spent really improved your performance?
I have managed to avoid performance reviews for several years now thanks to well-timed leave and management just not getting around to it. I don’t think I’ve been missing out. The performance reviews that I’ve had over the years did give me the odd insight, but nothing that timely and regular chats with my managers couldn’t have achieved far more effectively.
It turns out I have some rather unlikely allies in this stand against time-wasting paperwork from some pretty high-powered HR types. While co-hosting the latest AFR/Boss magazine HR leaders lunch, I was startled to find that United Group Limited’s executive general manager of human resources and industrial relations, operations and maintenance, Caren Schadel, and GE Australia and NZ HR leader David Arkell had dire predictions about the future of performance reviews.
“At the end of the day,” Schadel said, “if you took your annual review program and just pulled it out of the organisation, as long as everyone knew what they needed to do and they got feedback from their managers, I am absolutely positive managers could figure out how to allocate bonuses, even if they didn’t have a score in the system.”
Arkell is in charge of HR for 6500 people and said he believed “enlightened” companies would eventually scrap half yearly or yearly reviews in favour of more regular feedback and using technology to give both workers and their managers ongoing information about their performance.
Isn’t this a bit like the Queen suggesting that a hereditary monarchy is a tad out of date or the Kardashians wondering whether reality TV is all that intelligent or entertaining? Surely if the very people running an outdated practice doubt its value, that should be the final nail in its coffin?
One of the biggest problems with the annual performance review is that it’s annual. Recent research by Development Dimensions International Australia suggests many managers aren’t that great at conversing with staff and are particularly under-equipped when it comes to difficult performance management conversations. Some also avoid telling staff they are kicking goals because the managers don’t want to be hit for a pay rise. An annual review acts as a crutch, encouraging these managers to avoid improving communication even though we all need and want regular feedback at work.
A year is also a long time, so it’s hard to give a very fair account of a person’s efforts. It often means that what’s been done recently is given greater weighting, or people generalise from smaller incidents.
In a drive to make performance reviews comparable, most forms are also so generic that it can be hard to relate the questions to one’s own role. Just like elevator music, in a drive to suit everyone they please no one.
It’s time to review annual performance reviews – then let them die a natural death.
Great article – I completely agree with all the points you make about the value of annual performance reviews, particularly employees being disappointed being forced into a score. Also, I agree that there is much more value in regular, meaningful feedback. However, apart from the controls it places on bonuses and salary increases, think the annual performance review was created to force managers/ leaders to provide feedback – left to their own devices, many people overlook, avoid or forget to provide feedback. If the annual review (including quarterly temp checks, which many organisations build-in as part of the annual process)… Read more »
I could not agree more with the sentiments expressed in this article. I have a book out on this very subject in September called “The End of the Performance Review: A New Approach to Appraising Employee Performance” published by Palgrave Macmillan.
I agree with the sentiments, but we must remember (as Tracey mentioned) that much of the impetus behind implementing these systems is to set and monitor minimum expectations for managers. In this sense I would say that “enlightened” organisations will be the ones that have a culture that sits the responsibility for performance management (or let’s just call it management) firmly in the laps of managers. If managers are managing – communicating goals, setting expectations, collaborating with their teams on development, and providing regular feedback – there would be very little need for a system in a practical sense. It… Read more »