Performance Appraisals: Why They’re Mostly a Waste of Time and Effort

Editor’s Note: Dr. John Sullivan has been a provocateur and strategist in the field of human resources and talent management for over 30 years. His specialty is HR strategy and designing world class HR systems and tools for Fortune 200 firms, and he’s never been shy about telling it like it is.

That’s why TLNT asked him to share his thinking in a video series titled “$#*!@ Dr. John Sullivan Says!” Look for these videos twice a week here at TLNT.

Today’s topic: The problem with performance reviews

One of the topics that always seems to come up when people ask about how to improve HR, Dr. John Sullivan says, is performance appraisals.

And he adds, in his many discussions with executives, managers, and business leaders around the world, it is the one HR process that “everyone universally hates — employees hate it … managers hate doing it … and HR hates processing (them).”

The problem is that most performance appraisals focus on the employee’s traits — attendance, attitude, judgment — and not their performance. As a manager, you need to get away from reviewing these traits and instead focus on what Dr. John calls “performance counting, which is ‘how much money did you make me?’ or ‘how many of your goals did you meet?’ … so you (end up) measuring the output.”

This let’s workers check their own improvement, he says, and not have to wait an entire year to get a fix on how they are doing on the job.

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Another problem: no one in HR ever checks to see if performance reviews are accurate — all they check is of they are turned in on time. Plus, Dr. John points to an example of a company that took a hard look at their performance review process and found that over a two year period, not a single performer with a “3” was able to get to a “1,” or top performer status, out of 1,000 employees measured. “We’re not even sure if performance appraisals … or performance management, even works,” he says.

In fact, he says that performance reviews are one of the worst processes that companies engage in because they don’t use them properly to get rid of poor performers. Yes, feedback is good, but performance appraisals are more about filling out forms and turning them in on time, he points out, rather than using them to truly measure how well workers are doing on the job.

Did you miss the last segment of$#*!@ Dr. John Sullivan Says!” on “How Should We Deal With the Growing Employee Retention Problem?” You can see it here.

John Hollon is Editor-at-Large at ERE Media and was the founding Editor of TLNT.com. A longtime newspaper, magazine, and business journal editor, John has deep roots in the talent management space. He's the former Editor of Workforce Management magazine and workforce.com, served as Editor of RecruitingDaily, and was Vice President for Content at HR technology firm Checkster. An award-winning journalist, John has written extensively about HR, talent management, leadership, and smart business practices, including for the popular Fistful of Talent blog. Contact him at johnhollon@ere.net, connect with him on LinkedIn, or follow him on Twitter @johnhollon.

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2 Comments on “Performance Appraisals: Why They’re Mostly a Waste of Time and Effort

  1. Great post. Curious if Dr. John Sullivan has reviewed Atlassian’s new take on Performance Management systems (http://www.managementexchange.com/story/atlassians-big-experiment-performance-reviews) as discussed in the HCI/Management Innovation Exchange M-Prize? From my perspective, it is one of the best solutions I’ve seen a company make in a long time in this area and seems to address the concerns he raises above. For example, as one major difference from the average review, this is 12 monthly reviews broken down for more immediate feedback and smaller “slices” of conversations around different themes. Please comment @johnhollon, if you can.  Thanks!

  2. As a person who has reviewed hundreds of performance appraisal processes, I agree with Dr. Sullivan’s general concerns.  Nevertheless, the performance appraisal process is often the only method in a company where any attempt is made to consistently measure employee contributions based on a well-defined performance criteria.  The alternative to formal performance reviews is typically informal, untracked “hallway” converstations between leaders about who they personally like and dislike.  Performance reviews will never replace manager’s subjective opinions (nor should they necessarily), but they can provide balance to political “popularity contest” based approaches to workforce management. 
    Different types of  performance review processes may work better or worse for different companies, but ultimately some formalized review process is critical for maximizing workforce productivity. 
      
    It is interesting that most generalized criticisms applied to performance appraisals could also be applied to diet plans (people don’t like them, most people don’t use them well, and consequently most of them fail).  But the problem is often not the process, its how its used.  If you want to lose weight in a sustainable manner you have to find a way to eat less and exercise more.  if you want to increase workforce productivity in a sustainable manner you have find a way to consistently and accurately assess employee performance and use this to provide developmental feedback and guide personnel decisions.     We may not always like diets or performance reviews, but if we want sustainable results we need the discipline to use them.

    The flaws of performance appraisals are widely known.  What is needed is aggressive action to address them.  Fortunately, technology is making a positive difference in this area.  For example, performance review systems that make ratings more consistent and transparent and provide actionabe feedback to the organization can reduce many of the problems Dr. Sullivan points out.
     

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