Friday, August 6, 2010

Performance Reviews – A Beef With the Baloney

In early July NPR aired a story on the topic of performance reviews. Samuel Culbert, a UCLA business professor says that performance reviews are, “dishonest and fraudulent”. He even wrote a book on the topic – yes, a whole book on just this topic – titled Get Rid of the Performance Review.

Culbert explains his perspective that performance reviews are “total baloney” by noting that employees focus only on the good things that they accomplished in their reviews, and not what needs to be improved (by either the employee or the company).

While I agree with Culbert’s assertion that most employees hate performance reviews, I find the words dishonest and fraudulent somewhat extreme to describe the problem.

The employees aren’t lying. They are simply playing the game they’ve been taught to play. Do employees focus on their positive accomplishments? Of course they do. That’s the way the system works. The employee who volunteers in his performance review that he missed deadlines and produced an inferior product is likely to have a short-lived career.

The impact of a single review stays with the employee for an entire year, and will affect their salary, bonus, and their ability to compete for better jobs. Those who get a good assessment may let out a sigh of relief – but the relief lasts only a week or so before they start worrying about how much the bar will be raised for next year, and how they will stack up. Those with negative reviews worry even more – they worry about the financial impacts, that their boss doesn’t appreciate them, and that they might lose their job in the next round of layoffs.

In Culbert’s original article, which ran in the Wall Street Journal nearly two years ago, he makes some good points. Despite the fact that most companies tout the benefits of teamwork, and diversity, and leveraging the unique strengths of each team member, the performance review is counter to these notions. It’s Jack against Jill. Each man (or woman) for himself.

The very act of having to complete a performance review causes angst in most employees. I have known employees to spend hours during their end-of-year vacations writing (and re-writing) their accomplishments – as if what they write will actually make a difference in their assessment. It’s likely that the management team has already decided what each employee’s assessment will be.

Is the boss the bad guy here?

Culbert thinks so, but I disagree. The truth is, bosses hate performance reviews as much as the employees do.

We're talking about the bosses on the front lines – the first line managers who have to ask the employees to write up their accomplishments. They are the ones who spend grueling hours with their peer managers in ranking sessions to fight for their employees. Half of the time they lose. This is because they are being forced (by upper management and an HR system) to assess their employees with a skew that resembles a bell curve.

Worst of all, after spending months encouraging teamwork and team accomplishments, these managers have to deliver what they know will be perceived as bad news for many of their employees. In my experience, few managers look forward to this nerve-racking process.

What’s your take on performance reviews?


mtk said...

are you thinking about alternatives?

SteveB said...

In the large IT industry corporation where I was employed for over 4 decades the performance review system has evolved, IMHO, into one that is really only used to document those employees who may potentially be separated. To all others (85-90%) there are no benefits except to know that you aren't at the bottom.

Maurice Frank said...

Hi Colette,

Thanks again for another excellent blog post.

I do not believe that people always perform according to a bell curve, nor do I believe companies should want that. Ideally, companies should enable all employees to perform as well as they can, and if that means everyone does their job well, what's wrong with that?

I have worked as a consultant and contractor in K-12 education for the last ten years. As you know students are tested and measured over and over again. Schools are held accountable by the No Child Left Behind law to make sure all students meet minimum performance standards. Sure, some will do better than others, but the goal is to have zero students failing. Why shouldn't companies want all employees to succeed?

The bell curve concept may in general ways describe some aspects of human performance, but there is no reason to make it a goal.

Thanks for articulating your points so well.

Maurice Frank

Colette said...

mtk - good question. I think employees need feedback, so I wouldn't suggest eliminating reviews altogether. But I do believe a forced skew is inappropriate -- and as Maurice points out -- can even be detrimental to the company.

Peggy said...

Colette, thanks for your balanced view of the issue. It was helpful for me to read that. I personally think the review should be written by the supervisor/manager. I was surprised (even shocked, really) when I first learned that part of my job would include doing the assessment of how well I had done (or not done)in the previous year. It seemed to me like I was having to do my job and the manager's job too. And as a new employee how would I anticipate the future well enough to set goals that management would approve of well enough to continue ... well ... working there? Where was there helpful feedback for the employee in that? The process seemed skewed more than a little, I'll agree, and I was bewildered by it at first. -- I had worked in management positions in the past, and as such I was always responsible for providing yearly reviews. I would like to think they were helpful, and the employees I evaluated always stepped up to the plate with the recommendations I made (which were never intended to weed them out of the work environment, but rather help them to improve and succeed in the work environment. And so the idea of evaluating myself FOR my superiors was quite unique to me, to say the least! The comments posted by Steve B., actually seemed somewhat apt, at least, to my way of thinking.

Anonymous said...

I knew Dilbert, Catbert, Dogbert, the Pointy Haired Boss. Now Culbert joins them.

The same way Dilbert is funny because it is actually true, so is Culbert.

Kenneth H. Lee said...

I always found the review process useless because of the forced skew. At least of my managers claimed that there was no curve, but we all knew that he was a liar and never to be trusted and that he had no scruples or morals.

I heard that in some orgs senior management would decide how to distribute the 1s across the org. And that each manager had to fight tooth and nail to even be able to give his best employee a 1 rating.

As far as I was concerned, it was a popularity contest to get the 1 rating. If your manager did not like you, you were going to get the three regardless of how good a performer you were.

The majority of the department would get the 2 rating and some poor soul would get stuck with the 3 because the manager had to give out at least a single 3.

This is one of many reasons why I never wanted to be a manager in the company.

Colette said...

Peggy, you reminded me that -- even at IBM -- there was a time when the managers wrote the reviews -- and set the goals -- for the employees That changed when managers had many more employees reporting to them (span of control increased). It really did change the game.
Kenneth, yes -- it's absolutely true that there are skews.

Anonymous said...

One of the things at my place of employment is that you are graded against everyone else in your band, not your department. The problem is that you really don't know what all those other people at your level are doing so the general level of feedback seems to be 'do more stuff'. It's a bit like running a race with a blindfold on, you have no idea where you are in the pack so you have no idea how much harder you need to work to get to the front (or at least out of last place!).
I never understood why it's just not enough to do your job well and be good at it, there's always this push for us to do more, be more involved. That's fine for some people but many of us just want to be good at what we do. Seems like that is not enough anymore.

Colette said...

Anonymous, thanks for bringing that up. Yes, in most companies you are actually compared to others at your same level -- if your department is small or very varied in levels, then that means you are compared across a broader group. And yes, at some point it becomes totally unrealistic to do that assessment fairly.

Anonymous said...

As an employee, then a manager, then a non-manager employee again, and now a manager again (not with the same company), my view, FWIW, is that performance reviews should NOT be tied to compensation. If the intent of the review is to get more work from people, motivate them to do better, educate them about areas needing attentions, pat them on the back for good work, then the manager can,. and SHOULD give the employee an accurate, unbiased, unadulterated (by curves or skews) review, and coaching to improve. And that cultural shift will (hopefully) encourage employees to own up to their own shortcomings so everyone can win.

This takes a culture shift at the management level as well as an HR shift. By just saying, as it was in the old(er) days, management gets a buck of money, and gives it out as they see fit (with some oversight of course) and the performance reviews were to improve, and layoffs or raises were at management discretion and not some performance reviews based on skews or curves, then reviews could be used for what they were intended for - improvement.

Colette said...

Anonymous - I agree - honest direct feedback (without a stick) is what is needed.

Meg at the Members Lounge said...

Hi Colette, we exchanged cards briefly at BlogHer! I worked at DEC for 20 years in HR, before it transitioned to Compaq and then HP. Managers used to tell me that they wrote the reviews based on the money available. Many employees that were stellar were downgraded because their rating would not match the amount of money available. Sadly, 20 years later nothing had changed. My husband works for a large financial services firm and they literally have to offer up sacrificial lambs to be rated the bottom of the barrel in the name of the bell curve.

Colette said...

Meg, thanks for dropping by! Yup,the story holds true for just about any company.

I haven't had a chance yet to visit all the blogs from my new BlogHer friends, but I will -- promise!

SUEB0B said...

Here's my problem with performance reviews: in general, people don't change much. Good performers show up and perform, and the lazy, mean and dysfunctional tend to keep on as they have. People rarely make big changes in response to performance reviews.

The only real way to change behavior consistently is to change the corporate culture - to make it clear that certain behaviors will not be tolerated and support better behaviors on a moment-by-moment basis. The performance review doesn't really apply.

I find that regular 1:1's with my manager with open communications do a lot more for my job performance than a review.

I have also had a performance review used against me by a vindictive manager - she had always given me ok reviews (for 3 years) - nothing stellar, nothing terrible. Then she got transferred out by a director who realized the manager was toxic and the manager realized I had been siding with the director and hoping for her departure.

Because the manager was my manager for 6 months of the year, she got to have input on my review and trashed me to such an extreme degree that my new manager and director had to go to HR to get her comments expunged from my review. They could not, however, change her numerical ranking, which cost me several thousand dollars of my bonus.

That is a small example, but I can see toxic managers using their power of review to control and belittle their employees.

Colette said...

SueBob, I agree that open communication with your manager is what everyone should strive for.

Anonymous said...

Good managers are almost always good and don't need things like ranking. But large organizations need a way to manage the less capable managers ... hence the ranking schemes. Ranking forces the managers to do their jobs and differentiate the performance of their employees. I might add it also forces the managers to talk to their employees about their performance. Poor managers are often very reticent to do this.

I personally like the employee performance review input. It lets me tell my side of the story. I also like the 360 degree input where information is gathered from peers, those who work for you, and those you work for. Armed with this information a manager can truly come to a meaningful picture of your value to the organization. And of course 1 on 1 interim reviews should be done no less than monthly by the manager. Monthly reviews don't have to be lengthy or heavily documented, but if a manger does not have something meaningful to say to you about a month of your work shame on them.

I believe the review process should feed many masters ... value to the business, continuous improvement, learning, promotion, compensation, corporate culture, and morale. It must be an integrated system, based on honesty, if it is to benefit all parties.

Anonymous said...

As much as I despise the annual review ritual, it is the norm in the corporate world. There is room for improvement. For one, I don't think management should treat annual reviews as "just another item on the task list" if they truly want to improve the organization. From my limited observation, it looks like the number of employees who truly work in the interest of the organization is inversely proportional to the size of the organization.

As with any relationship, Honesty is the basis for a successful review. I have worked with many managers all with different management styles, but I recall only a handful of good managers, and even less excellent managers - those that I'd work with again in a heartbeat. The excellent ones did not wait for the monthly or yearly review to give me improvement tips or to pat me on the back. They always appreciated me for being proactive. And the most important factor is that they did not have to directly manage me.

At the other end of the spectrum are managers who relay a "good/on track" feedback in the monthly reviews but rate you below average at the year end. The honest ones would relay pertinent information at least monthly to bring the employee back on track instead of leading them astray.

Colette said...

Anonymous, you make a great point about the 'scheduling' of performance reviews. It does make the whole idea a bit forced.

Anonymous said...

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Colette said...

Henry, thanks! You made my day!