Friday, April 29, 2011

Should Performance Reviews Be Fired?

"Performance reviews." The words strike fear and dread in the hearts of employees everywhere.

Their angst is understandable. Performance reviews typically are not done often enough and all too often are done poorly. A good performance review gives employees constructive, unbiased feedback on their work. A bad one demonstrates supervisor bias and undermines employee confidence and motivation.

The balance does not seem to have tipped yet in favor of the good ones. David Insler, a senior vice president at New York-based Sibson Consulting, estimates that only about 35% to 40% of companies do performance reviews well.

Frequency is clearly one of the issues. At most places, says  Peter Cappelli, head of Wharton's Center for Human Resources, reviews occur annually. "If you wait a year to tell employees how they are doing, they are almost always surprised and unhappy if the results are not positive. Humans are hard-wired to focus on the negative," Cappelli notes. "So 'balanced' feedback always leaves us concentrating on the bad parts" of the reviews.

But he and others point to rapid changes in both the workplace and the workforce that are altering how performance is evaluated. For example, because more and more companies -- from software and engineering to advertising, accounting and consulting -- are heavily project-oriented, reviews are often done when projects are completed or at set points along the way. The annual review then becomes a no-surprises summary at the end of the year used primarily to share information about raises, bonuses and other compensation.

As for the workforce, the latest influx of employees includes a generation of millennials (those born between the late 1970s and early 1990s) who are accustomed to constant and instant feedback -- from parents, text messaging friends or social media sites. They want the same from their employers. As Daniel Pink, a workplace expert and author, noted in a recent article in The Telegraph titled "Think Tank: Fix the Workplace, Not the Workers," millennials have "lived [their] whole lives on a landscape lush with feedback." Yet when they enter the workforce, they find themselves "in a veritable feedback desert.... It's hard to get better at something if you receive feedback on your performance just once a year."

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