To Review Performance or Not to Review Performance
Let's start with a question: Which of these statements is true?
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A) Only 45 percent of American workers said the feedback they receive in their performance reviews is fair and accurate.
B) 67 percent said the feedback they receive during their performance appraisal is a surprise to them.
C) Only 25 percent said their performance reviews include specific examples to support the feedback they receive.
D) All of the above.
E) None of the above.
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The answer, unfortunately, is "D," according to a recent report.
It's statistics like these that are causing a small number of companies to scrap formal performance appraisals—between 1 and 10 percent no longer conduct conventional reviews.
The companies that still do semi-annual or annual reviews maintain that scheduled conversations between managers and employees enable them to formally recognize their employees' achievements, and let them point out weaknesses for employees to work on.
Managers frequently use reviews to offer career guidance and to build relationships. Eliminating performance evaluations, supporters say, might mean that "difficult" conversations between managers and employees never happen.
Failing to officially document problematic performance can pose problems if an employee is fired. But many employees say performance reviews make them nervous, and don't motivate them.
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Managers need to know how to speak to the people they supervise.
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Some companies agree and say they are glad that they no longer give reviews, according to a yet-to-be-published study which examined 17 firms that don't use formal performance appraisal systems. All 17 reported low turnover, high employee morale and strong relationships between managers and employees, among other benefits, according to the study by Scherwin, Coget, and Kirner.
Last year, Atlassian Inc., an Australian software company, ditched traditional performance reviews for its 450 employees. The publicly blogged experiment, which continues, asked managers and their subordinates to discuss performance and goals at weekly one-on-one meetings, with feedback going in both directions. The company says it's working.
Glenroy Inc., a Wisconsin packaging film manufacturer with 178 employees, hasn't given formal performance reviews for about 20 years. The company's informal system has put responsibility on workers to offer advice. The employees, meanwhile, are trained to give feedback effectively, and to receive it graciously. Meanwhile, an outside consultant determines pay, and workers are promoted if they and their supervisors think they're ready.
New experiments in employee evaluation doesn't always work, however. The University of Wisconsin Credit Union gave up performance reviews but returned to them because no other system had been put in place. Experts say it's important to do something if you don't conduct performance reviews.
The bottom line is employees need to know where they stand with their supervisors. When done right, formal performance reviews work well. If companies eliminate them for whatever reason, they need to put another effective strategy in place. Employees need to know where they stand; managers need to know how to speak to those they supervise. Companies do best when all employees feel that the evaluation process—whatever it is—is transparent.
TribeHR makes it easy to try new formats for your employee performance reviews. Get started today with a free, no-commitment 60-day trial.
