Employee reviews – passé and in the way of better results

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Print this page by Bernie Niemeier
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Photo by Mark Rhodes

The home stretch of 2015 is here.  As business begins in the fourth quarter, thoughts naturally drift toward the year’s accomplishments.  For most managers and employees, this likely includes individual performance assessments.

Often dreaded and anxiety inducing for everyone involved, annual reviews became a business staple in the 1960s and 1970s as corporations scaled up, creating conglomerates through mergers and acquisitions.

Performance reviews were viewed as helpful in managing significantly larger numbers of employees.  This also led to the ascendency of bigger, more powerful human resources departments.

Throughout business history many have worked to improve these reviews.  I certainly have.  As a younger, more analytically focused manager, I tried just about everything from basic management by objectives, to five-point scales, to values-based assessments, peer-to-peer ratings and 360-reviews.  Nothing really ever seemed to work very well.

Apparently, I’m not alone in this experience. According to a late-2014 National Public Radio story, most human resources departments give even their own review process below-average marks for effectiveness. And Samuel Culbert,  a UCLA management  professor, has gone as far as to label employee reviews as “fraudulent, bogus and dishonest.”  In the pages of The Wall Street Journal, Culbert called them, “One-sided forms of employee intimidation that breed defensiveness and tension.”

On hearing this, I decided to toss out Virginia Business’ review process.  The staff heaved a sigh of relief.

Our handbook now reads, “Reviews are stressful, time consuming and counterproductive to more regular communications concerning job skills.”  It goes on to note that each employee receives ongoing feedback from supervisors, peers and customers and that we should all seek to cultivate a culture of “active mutual support.”

Problem solved?  Kind of. Like any other company we still deal with occasional performance problems.  I’m hopeful that this approach allows us to handle issues a little more effectively with less procrastination while waiting for an arbitrary review date.  And maybe, just maybe, we are an even better place to work.

Again, we’re not alone.  According to one study cited by The Washington Post, 6 percent of Fortune 500 companies have done away with employee rankings. Accenture has announced that it will do away with once-a-year evaluations in 2016. Other large companies, such as Microsoft, Adobe and Deloitte, have eliminated or dramatically simplified their reviews.

Reducing tension and defensiveness at work sounds like an opportunity. What should take the place of effort devoted to annual reviews?  How about more time spent listening to customers?  It’s always good to get outside of the building and see what’s happening in the marketplace.

Lately, we’ve been conducting business roundtables. This includes one with businesses in Northern Virginia hosted by the Fairfax County Economic Development Authority.   In September, we held our annual Economic Expectations Roundtable, hosted by the Virginia Society of CPAs.  Just a few days ago, we sat down with several commercial real estate executives to discuss trends.  Coming up in November, we’ll host the annual Virginia Business Political Roundtable.

All of these sessions are designed to keep our editors in touch with business executives.  This translates into better content for readers and ultimately develops an increasingly effective audience for advertisers.

So if you aren’t happy with your company’s performance reviews, maybe it’s time to redirect that time and energy into more customer-facing activity.  You won’t be alone.  In fact, you’ll be in good company.  You might even be rewarded with better results.  Go for it!

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