Performance reviews: outdated, outmoded, and slowly dying

It’s the first quarter of the year. An employee gets an automated email announcing that review time is coming, and the employee must complete the self-review. Employee agonizes over completing the self-review, procrastinates, and puts it off until the last minute when she spends an entire day and a half finishing the document. Then she sits down with her manager to discuss her achievements of the previous 12 months; the manager points out a few areas for improvement and then gives her a 3 on a 1-5 scale. The meeting ends, and the employee and manager never speak of this until the following year.

If this sounds all too familiar, you are in good company. Performance reviews—the painful, time-consuming, annual process loathed by employees and managers alike—are still part of corporate life. There is research that ties the timing of performance reviews to voluntary attrition. This is unsurprising because traditional performance reviews focus on negatives and deficiencies, masked as “areas for improvement,” rather than what the individual accomplished and contributed during the year. They are generally ineffective in actually changing anyone’s performance. Here’s why:

It’s only once per year. People need feedback all year, not just once per year. If you are a manager and do not have regular discussions with your direct reports, you are doing them, and yourself, a disservice. 

They are overly formal. Employees and managers hate having to comply with a process in which they do not fundamentally believe.

They make for additional work. No explanation needed!

Employees are surprised by the feedback during the review. Ideally, no one should go into a performance review meeting to have a bomb dropped on them.

They are unnecessarily complex. A 14-page document, 3 formal meetings, and communication with HR? Arduous. 

This entire process is a holdover from the industrial/manufacturing age. It has been adopted and applied to knowledge workers, but it just fails to align with the focus of their work and skills. It is easy and valid to evaluate how many widgets a line worker produces over a year. But in a corporate setting, they do little more than perpetuate a power/control dynamic. Fortunately, younger employees are entering the workforce and are eschewing performance reviews. 

As the workplace evolves, employees demand sincere, ongoing feedback rather than a once-per-year meeting. And some savvy companies realize that rather than focusing on what employees do wrong, they can focus on what employees are good at and reap the results of an inspired and creative workforce. We can only hope that this entire process will go the way of the IBM Selectric.