Traditional performance reviews are destroying employee morale and killing the bottom line.
Instead of improving performance, the annual review is robbing organizations of their most valuable asset — trust.
Samuel Culbert, a professor at the Anderson School of Management at the University of California, Los Angeles, and author of Get Rid of the Performance Review! How Companies Can Stop Intimidating, Start Managing — and Focus on What Really Matters
, sat down with Talent Management magazine to explain how to give employees evaluations they can believe in instead of the fraudulent ones they currently receive.What’s wrong with the annual pay and performance review?
It’s very simple — it doesn’t do anything it’s supposed to do. It’s supposed to be objective and tell employees what the company thinks about the employee, but performance reviews are not objective, and the evaluators are not objective. Studies show if you change the boss, the reviews change. That’s because the metrics they use for evaluating employees and scoring them don’t mean the same thing to different people. One manager’s team player is another boss’ conflict avoider. While we’re on the point of metrics, what does a 2.5 on listening skills mean? I don’t know. No one does.
The performance review puts a bat in the boss’ hand. It’s supposed to help employees improve, but the last thing an employee wants is to tell his or her boss what’s wrong and be forthright about a course of action in an area they would like to improve. What you don’t want are people pretending they have competencies and skills in areas they don’t have competencies and skills. But, with the performance review, you have to pretend. What we’ve got in companies, what we have in this world, are flawed, imperfect people. Get these imperfect people getting results for the company. That’s what you’re supposed to get results for.
The performance review puts pleasing the boss ahead of getting results for the company. It doesn’t determine pay. The market determines the pay. Why do you think so many companies keep doing them?
It’s because of what performance reviews do accomplish. They allow bad managers to get away with bad behavior and never be called on it. They intimidate employees, and they keep them kind of quiet as a way of ensuring the boss’ definition of what the company needs and should have becomes the employee’s, but it’s as invalid as can be.