When Do Performance Evaluations Actually Work?

A couple years back, I wondered aloud here if performance evaluations ought to be eliminated.   This theme has been taken-up with a vengeance by Sam Culbert in his Wall Street Journal article and now his book Get Rid of the Performance Review.  I was thinking about this topic again because Tara Parker-Pope raised the question in her New York Times health blog called "Well" in a post called Time to Review Workplace Reviews?  

Tara mentions Sam's book and suggests that bad performance reviews may be so distressing that they can damage physical and mental health, as well as productivity.   I am only person mentioned in the article who comes close to defending reviews, but am quoted as saying:  “In the typical case, it’s done so badly it’s better not to do it at all.”  I guess I still agree with my quote, but while I think that most performance reviews suck, there are a least a couple companies out there that do them effectively, so perhaps it is going too far to say they should all be eliminated.

One company  that I know pretty well (the NDA I signed forbids me from mentioning their name) does such a good job of using reviews for both developmental and evaluation purposes, that most people I know who work there report the system is remarkably fair and that it has helped them improve their weak spots (the main complaint is how much effort it takes, but most employees report it is worth the trouble).  And perhaps the ultimate test is that even the people who get negative reviews there and are encouraged to leave the place generally report that it is an excellent and well-managed process.  Now, this company might be as rare as hen's teeth (this is the first time I have ever used this phrase in writing or speaking in my life).  And even in this exemplary company, I have met a few people who complain about the system.

Yet this and other exceptions raise interesting questions about lessons that we might learn from such "positive outliers," as they call them in medical research and elsewhere:

1.  Have you been part of a performance evaluation system that actually works?

2. If so, why did it work? 

I would be most curious to hear some success stories, given all the failure stories I hear (just look at the 150 or so comments following Tara's post... most are pretty negative...although I am intrigued by the person who reports that being in a place with no performance reviews is even more stressful because people never know where they stand).

P.S. I also wanted to thank Tara for raising the additional issue of how distressing a bad boss can be and giving a nice plug to Good Boss, Bad Boss at the end of the post.  I am delighted to have a book that The New York Times will actually mention by name, unlike The No Asshole Rule (even though they accepted this advertisement, they called it The No ******* Rule on their bestseller list, and in most stories, they simply say that I wrote a book on bullying and don't list any name).  Although I confess that this (apparently) new found respectability at The Times makes me a bit uncomfortable, as I am always weirdly happy when people from established institutions are offended by my actions. I know it is not a very mature reaction for a 56 year-old professor, but such vestiges of my youth persist.

Comments

[Blue Girl]

Employees and managers should be able to exchange performance reviews of each other. That would create a dialogue and a zero-sum game that might have a productive outcome.

[Elisabeth Bucci]

In my experience, the only purpose of the performance review is to justify keeping everyone's salary under a certain predetermined percentage. Period. If you eliminated the process, and just came up with the percentage, you would save a lot of money, stress and hassle. And yes, they are so poorly performed, so why bother? Why treat us as children? Why not let grown adult professionals do their own reviews? I mean, we are adults, aren't we?
Charles Jacob wrote a book (on my list, haven't read it yet) that basically states that our brains are not wired for performance reviews. Here's Business Week's review:
http://bit.ly/cA9pqx
Off to read the other links you posted on this subject, which is one of my favourite rants...

[dawn]

I'm surprised that no one has yet mentioned being required to write their own performance review! My husband has been writing his own reviews for years. It is standard practice at his company (high tech).

[Wally Bock]

Bob, you ask for places where the performance review process is working. I don't know of any organizations where that's true overall, but my research and experience lead me to think that it's happening for good supervisors in all kinds of companies.

When I studied top performing supervisors, we found that there were a few behaviors that they did differently from their less-effective peers. They showed up more and had more informal conversations with their team members, including conversations about changing behavior or performance.

That enabled them to catch problems early, when they're easier to solve. Thus, they had fewer cases where they needed to do documentation and formal conversations. Their team members had a good idea of how they were doing because they got frequent and usable feedback.

The result was that when time came for the official, on-the-company-form, performance review, their sessions were very different from their less-effective peers. Top performing supervisors took more than three times as long for the session. And they concentrated on the future, usually development opportunities, rather than the past.

Those supervisors worked within the same system that other supervisors did. It was just as flawed as the practices that so many are writing about. But the system worked for them because any effective performance system has to be rooted in good supervision which includes a lot of conversation, communication, and coaching.

[James Birchall]

Never met a performance review in business that was worth it's salt. Neither in the military.

Where I have see them used extraordinarily well is in Sport. Everyone (fans, coaches, athletes, family, competitors) is constantly evaluating performance, both objectively and subjectively, and then using that knowledge to feed back into the training cycle.

The trick is that it's constant, recorded, metric oriented, immediate, and the athlete has learned that it's not personal.

It's simply data used to get excellent. And if you listen to the data you WILL get excellent.

The problem in business is that it's so often used to get rid of people that we don't like (both bosses and employees), rather then make them into awesome individuals. Too, the business review is often focused on making everyone the same, rather then acknowledging unchangable weakness and crafting strategy / tactics to minimise their impact.

I'd love to know why that is.

[Bruce Lynn]

Let's be clear here...a 'Performance Review' is a 'review of performance'. Though related, it is not (a) a 'Compensation Review', nor (b) a 'Development Review'. Rule #1 is to keep the Performance Review focused on 'Performance'. Unfortunately, most companies roll all three (along with lots of other political and systemic nonsense) into one big, confusing, mish-mash of an employee meeting. The aim of a Performance Review is just that, Performance.

Rule #2 is to have clear, measurable objectives. The Performance Review is the time to objectively assess 'did you do what you said you would do'. Did you sell as much as, did you improve quality scores as much, did you answer as many customer problem as much, etc. The aim of the Performance Review is to look at the Performance...against measurable outcomes.

Rule #3 is to stay objective and not judgemental. As Jack Welch was one of the most prominent to assert, bad performance does not mean a bad person. There are lots of reasons that a great person can deliver a bad performance. The aim of the Performance Review is to understand the results themselves, how they measured up against the needs/expectations of the organisation, and what can be done to do even better going forward.

A Performance Review well done provides invaluable input to the running of the business and managing what needs doing for the Manager. It also provides objective, measurable input into Compensation Reviews that can allow rewards to have some basis on objective measures that the employee understands and can see transparently rather than just seat-of-the-pants whims and biases. It also lays the groundwork for productive Development Reviews (eg. if it is determined that a shortcoming in Performance was due to relatively high vendor costs, maybe the individual would benefit fromm either Financial Analysis training or Negotiation Skills coaching).

[Daniel Christadoss]

Well for me performance reviews have been very positive and something I always look forward to.
First of all I review my own performance during the year. I definitely know what I did right and what I did wrong during the year.I also know what I have to improve on. At this point I am prepared for the review.

I approach the review with an open mind and am prepared for constructive suggestions on improvement.

As I grow older and more confident of my capability my reviews come closer to what I have thought it would be.

We all like feedback on our performance and during review time you even get it in writing.

What more can I ask for as they usually throw in a reasonable raise as well.

So, my theory is that performance reviews do work when we want it to. It is in our hands.

[Jonathan]

I would also agree that performance reviews can be a good line of defence for employees. I had a friend who was let go from a high-tech company in Europe and initially the company asked him to resign or be fired for cause. He refused to quit and asked "On what grounds?" He pointed back to his quarterly reviews, which were all stellar (90% or higher), and asked again, "On what grounds?" He wound up negotiating a year severance (helped by strong labor laws in that country).

Now I know that my friend could be prickly and stubborn, but I do feel that if his managers had issues with him, they should have written them into his performance review to make that evident.

Bob, I can't remember if you said this, but I like it: "No one should ever be surprised to get fired."

[Joe Marchese]

I would encourage any organization to sustain a culture of regular feedback and open communications as a better way to improve individual and corporate performance. One of my clients uses the term 'appraisal' to mean 'compensation review', and does neither on a systematic basis... but we're working together to find the right way for them to achieve both.

[Nathan]

While I have not been a part of a review process that works well as a whole, I've seen things that seem effective based on personal experience.

In no particular order:

1. People need to be engaged in the process and the review needs to mean something. It should not be a check-box process.

2. Words and actions of management need to match.

3. The review should not come as a surprise. Otherwise, people are not doing their job(s).

4. Rankings are futile. Comparing people with different functions is even more futile.

5. The review process should be 360, for the supervisor and the company.

6. Real changes need to be put into effect by all involved. Otherwise, don't do it if it cannot have the needed follow-through.

7. The purpose of the review process needs to be effectively communicated and repeated.

8. Fairness and consistency are vital.

9. Is it worthwhile trying to improve on weaknesses? They are weaknesses for a reason. That is different from a deficiency which can be addressed. Since people have certain strengths and weaknesses, then those they work with should be complimentary (tangent here) to them. To certain extent, some weaknesses can be compensated for by the individual.

[BrianSJ]

The Deming argument against them is that most of people's performance is determined by the system, not the individual. That makes changing the system a much higher priority than staff appraisals but doesn't really give grounds for stopping them. The main thing I learned when being trained to give them was that feedback needs to be all the time.timnce a

[Nicole]

I've worked at an online publisher that had a good performance review process, based largely around 360-degree reviews. I loved writing them for some of the people I worked with. It felt really great to be able to tell their managers how they had really gone above and beyond the call of duty in certain cases.

I now work at a print magazine that doesn't do performance reviews at all. Instead, staff members are surprised with accusations from management, but there is no evidence presented to support those accusations.

For example, at a "get to know you better" one-on-one lunch, the CEO told a staff member that her coworkers had been telling him that she was at the center of all the office problems. She had no idea that any of this had been going on--or that it would be the major subject of the lunch. Turns out it was one coworker.

Managers here are so unwilling to stick up for their staff, that they force people to negotiate their own raises and promotions directly with the CEO. They refuse to get involved.

Performance review or no, an asshole boss will find a way to be an asshole. But at least with a performance review, there's a paper trail the employee can potentially use to defend him- or herself.