Performance Reviews: Are They Worthwhile?

Reviewing the Situation

We’re getting ready to do performance reviews here in our office.  We do them annually and (at least in my department) we invest a lot of effort in completing them.  Throughout my career, I’ve heard (and even participated in) a lot of grumbling about performance reviews being a “waste of time” (sometimes with even more colorful language!).

Why do we do this?  There’s always lots of competition for our time.  It would be easier to skip this time consuming process.  Surely, our top performers know they’re doing well and our worst performers know they’re in trouble, right?  Generally, yes.  However, there’s a lot more to it.

Performance reviews should be part of an ongoing dialog between a manager and an employee.  Communication about performance can’t be a “once a year” event.  The performance review should provide a focal point for frank discussion – reflecting back on what went well and what went poorly in the review period AND looking forward to new goals and growth opportunities for the employee in the coming year. 

What shouldn’t you do?  Here are several traps I think should be avoided:

  • Don’t focus only on low performers
    Many managers spend the bulk of their time addressing “performance problems” with difficult employees.  If more of that time was spent helping the best performers become even more productive and more valuable, the payback would be much greater.  Spend time providing serious and thoughtful feedback to the top performers.  How can they become even more valuable?  How can you challenge them?  What new goals or projects could motivate them to grow (and help the organization as well)?
  • Don’t do it all yourself
    When you’re writing a review, it’s unreasonable to think you have the complete perspective on that employee’s performance.  Ask for peer reviews.  Ask the employee to complete a self-review.  Use everything you receive as input for (but not a replacement for) your own assessments as you complete the review.
  • Don’t focus exclusively (or even primarily) on a numeric rating
    Most companies use some kind of numeric rating.  These systems provide a good “short hand” for summarizing the content of the review, but I don’t recommend that you rely on them.  The core of the review should be in written comments, including feedback on previous projects and goals and specific suggestions for future improvement, along with objectives for the next review period.
  • Don’t compare employees to each other
    Lots of companies (including big ones like Microsoft and Hewlett-Packard) do “stack rankings”.  Personally, I think that’s stupid.  It’s a waste of time to force managers to “fight for” their employees while comparing people who have applied disparate skills across vastly different responsibilities and expectations. 

What should you do? Here is what I recommend for creating a worthwhile performance review:

  • Broad participation
    Employees should write self-reviews and everyone should be asked to provide “360 degree” review feedback – peer reviews and subordinate reviews of managers – for the people they’ve worked closely with during the review period.  This collective input gives the manager writing the review a more complete perspective of the work the employee has done.  Naturally, the manager needs to be careful to ensure that the source of candid 360 degree feedback is anonymous.
  • Focus on constructive feedback – both backward and forward-looking
    It is important to identify what the employee did well and what skills they have that are strong.  It’s equally important to identify where the employee can improve and grow.  This is especially critical for the best employees.
  • Deliver the review in person, in a one-on-one meeting
    A review document isn’t a complete, stand-alone entity.  It’s a part of a conversation – it provides reference material and talking points for the dialog between the manager and the employee.

In the end, if the information delivered in the performance review is a big surprise to the employee, then the manager probably hasn’t been communicating effectively throughout the year.

Next time, I’ll share a funny story about the most interesting performance review I ever received.

 For now…I’ll leave you with this thought:

Performance reviews, like many other management tools, provide value that’s directly related to the effort you put into them.

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