Should You Get Rid of Performance Reviews?

Posted July 31 2013
competency-based-performanceAn article in the Wall Street Journal lists several reasons why we should get rid of performance reviews. The author states that while performance reviews are intended to offer an objective employee assessment and guide compensation, this is rarely the case.  Rather he argues that current performance review processes are one-sided, inhibit straight-talk relationships, result in low morale, damage communication and teamwork, provoke power and intimidation, do not influence pay and are subjective and political, among other challenges.  He instead suggests performance previews in which reviewers and reviewees hold reciprocally accountable discussions about how they are going to work together more effectively.

This article nicely summarizes the challenges that many performance management functions face today.  CTK has found that performance evaluations are often subjective, have limited influence on compensation and lack clear linkage to corresponding performance plans. Ultimately, CTK does believe performance reviews have merit, but the process used by many organizations requires improvement. Here are a few ways to do that:

    1. Create a performance management process. Performance reviews by themselves create little value. 
    2. Each staff member should develop a specific performance plan. Ensure that every staff member has a clear vision of what needs to be accomplished as well as what would be considered outstanding performance.
    3. Performance management needs to be an all year process, not a single performance review meeting. It begins early in the year with performance planning, followed by employees actively work their plans, regular reporting of results, and several performance reviews. Recent research has shown that given the fast pace of change, planning in 3-month cycles is more effective than the traditional annual cycle. 
    4. Typically no single individual has full insight into another person’s performance. Although many have counseled that 360-degree multi-rater feedback is only for development purposes, we see an increasing number of companies employing a “social performance management” approach that incorporates feedback from many sources. 
    5. Performance planning focused on coaching for current and future job success creates a collaborative, positive process for all parties. Although some gaps in performance may need to be addressed, creating opportunities to further develop and apply individual strengths often creates more value for organizations and their staff.

In addition to performance assessments, development assessments, which focus on role-based competencies, are also important. Development assessments measure the current level of proficiency, e.g. from beginner to expert, and allow the organization and individuals to improve their match with the work they perform now as well as for new assignments in the future.  Furthermore, competencies for supervisors should include coaching, employee development, etc. to ensure accountability.  This approach extends the recommendation and further minimizes the challenges outlined in the article.

Click to read more on CTK's perspective on performance management.

 Follow CTK

 Blog Categories

Talent Management Hot Topics
Blog Series

 How Can We Help You?