Performance reviews – a global scourge
It is time to kill the annual performance review, for decades a feature of corporate life around the globe, dreaded both by those who do the reviewing and those who are reviewed.
It is a corporate sham and one of the most insidious, most damaging and yet most prevalent of corporate activities. It is a pretentious, bogus practice that produces nothing that could be called a corporate plus. It is universally despised yet few people do anything to kill it.
So says Samuel A. Culbert, a consultant and professor of management at the University of California, Los Angeles (UCLA) in a just-published book entitled, Get Rid of the Performance Review! The book grew from a 2008 article in the Wall Street Journal which, Culbert says, prompted a thousand letters to the editor and a flood of online comments, mostly in favour of his argument.
It is not new, but presented in particularly blunt language. A decade ago, a book by Tom Coens and Mary Jenkins entitled Abolishing Performance Appraisals made similar arguments, based on a study of 26 companies where morale, effectiveness and profitability had improved after they abolished appraisals.
Doubts about the process emerged as far back as 1957, with an article in the Harvard Business Review by Douglas McGregor, a management professor at the Massachusetts Institute of Technology, who suggested replacing the conventional boss-subordinate meeting with an approach allowing the employee to set personal short-term goals and evaluating himself.
An Uneasy Look at Performance Appraisal, the headline said. There has been a lot more unease since then, so why does the practice persist? And why would a date on a calendar be relevant to determining when someone’s performance needs reviewing?
Culbert zeroes in on two culprits. The first is a management theory – Management by Objectives – which came into vogue after the end of the World War II and provided for managers to set goals for their departments and then figure out what individual employees need to do to achieve department goals.
The performance review that went with the theory judged an individual’s performance rather than that of the department or organization. In that kind of system, where is the incentive for the individual employee to improve the corporation as a whole?
And the second culprit? Human Resources departments: they insist on performance reviews “to ensure themselves a secret-police-like power base they can use to secure themselves with managers.” Lest there be any doubt about his dim view of HR, they strive for “keeper-of-dirty-little-secret/KGB-like status.”
“BULL—-” AS ETIQUETTE OF CHOICE
As Culbert sees it, performance reviews, as conducted by most companies, are based on a myth – that supervisors can come up with a scorecard free of bias, sentiment and the personality of the manager. In other words, that they can be objective.
If that were the case, wouldn’t employees get the same rankings when they change bosses? Culbert cites a study (by the consulting firm PDI Ninth House) that looked at 6,000 employees reporting to two bosses. The rankings ran from “outstanding” to “very weak.” Of the employees deemed outstanding by the first boss, 62 percent received a lower ranking by the second.
And how can reviews be objective when managers are forced to sort employees into the infamous bell-shaped curve – 20 percent classed as outstanding, 70 percent as average and 10 percent as poor performers. That is a recipe, Culbert says, for guaranteeing duplicity and making sure employees won’t cooperate with each other.
“Employee No. 1 asks Employee No. 2 for some numbers. No way will he get them, because Employee No. 2 has no incentive to make Employee No. 1 look too good. Because if No. 1 looks good, No. 2 looks worse, relatively. You have a system where nobody wins.”
Contrary to corporate spin, the chances of a frank and open-minded discussion in the traditional once-a-year performance review session are remote because people are reluctant to speak their mind to their bosses and focus instead on saying what will earn points and make a good impression.
Pretense is more important than fact which is, says Culbert, why “bull—-, not straight talk, becomes the etiquette of choice in any corporate relationship where the only opinion that is listened to is the boss’s.”
That observation and choice of words is inspired by Harry Frankfurt, the Princeton University professor who published a slim philosophical treatise entitled On Bull—- in 2005. It took issue with “bull—-ters…who are attempting by what they say to manipulate the opinions of those to whom they speak.”
That obviously applies to more than corporate life and performance review sessions and the book’s phenomenal success (translation into 25 languages, a place on the New York Times bestseller list for months) points to widespread distaste for fakery and phoniness.
Does Culbert have a cure for the ills he diagnoses? Yes. He calls it “performance preview”, a system where managers mentor and coach employees to succeed. They have conversations when either feel they are necessary — not in a formal session once a year.