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I've been at all levels of business over the last 15 years, from entry level employee to executive, for 4 different companies. At their best, performance reviews provide meaningful feedback and comprehensive development plans, and at their worst they tear an organization apart. But even the best performance reviews are a poor substitute for the real work management should be doing in this area with their employees - that work being the provision of guidance, direction, and support to staff on a regular basis. In a poor organization performance reviews provide a bare minimum of feedback to employees about their job performance, and in good organizations they are completely unnecessary.

The vast majority of reviews I've given and received are nothing more than a banal rehashing of poorly remembered facts that generically support a series of back-room deals designed to keep pay raises within budget boundaries. Both HR departments and senior level management feel that having an "impartial" process protects the company and supports merit increase decisions, but in fact 99% of all performance reviews end up ranging from good to great with no real basis in an employee's true job performance. As an example of this, I have never seen a terminated employee who was with an organization for any length of time who did not have a personnel folder full of excellent job reviews.


Do organizations just do them because they have always done them? Short answer is yes. Longer answer is that the companies I know are full of Good Germans who do what they are told to do because that's their paycheck and if they get a paycheck for what they are doing they must be doing right. That may be a constant of bureaucrats everywhere.

Chip Overclock

Being an engineer who makes occasional forays into management, I often make the mistake of trying to treat merit evaluation issues numerically. One book (from his Ph.D. thesis) that taught me -- in a way an engineer can appreciate (which is to say, numerically) -- why this is really a stupid plan was Robert Austin's MEASURING AND MANAGING PERFORMANCE IN ORGANIZATIONS (Dorset House, 1996). He applies a Game Theoretic approach to show why merit evaluations don't (can't) work in information organizations (which is to say, pretty much all of them these days). It's one of those books (like Sutton's own HARD FACTS) that changes your whole outlook on the world. I consider it required reading for... well, for just about everybody. Austin was an executive with Ford Motors, and is now IIRC at Harvard Business School. (I find Nelson Repenning's work at MIT on fire fighting in organizations to be closely related, BTW.)


A friend of mine, who happens to be a manager, had a truly bad time while evaluating his people. He once told me "Why should I have to judge who's the best performer so he can have the only pay raise allowed in the department, when I think that almost everyone did a good job and deserve it".

On the other hand, I had my evaluation last September. Although the overall rate was "good" (good puppy, have a cracker?), the comments I received from my boss left me depressed for months and hating every moment I spend at the office (comments like "you're trying to do so much outside the department that someone might think you don't have work to do. Just do what you're told.")

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