Is the Broken Performance Review Worth Fixing?
Relying on annual performance reviews to measure and motivate employees generally does not work. This enduring truth and some of the underlying reasons were highlighted in an article from the Spring 2023 edition of HR Magazine. Review processes often require managers to rate employees against vague attributes (e.g., strategic thinking or leadership potential) opening the door to inaccuracy and bias. Worse yet, ranking systems force leaders to designate a certain percentage of employees as “low performers,” fostering corrosive internal competition. At large, managers continue to be dissatisfied with their organization’s review system.
The situation isn’t much better from the perspective of the person receiving a review. Among North American employers, only 1 in 3 indicated that employees felt their performance is evaluated fairly. The absence of a formal review doesn’t solve the problem either. Younger workers focused on career growth appear less content with concluding “no news is good news.” They desire and expect helpful feedback from leaders. When these workers have other opportunities, they may choose to resign over remaining in the dark about their performance.
Despite the widely acknowledged issues with traditional performance reviews, organizations seem intent on making them work. A commonly proposed solution is making reviews more frequent, often quarterly. The article stated that, according to experts, the only situation worse than conducting only an annual review is doing none at all. I respectfully disagree. Subjecting employees to an inaccurate, unfair, and ineffective review process four times a year is also worse than doing it annually.
So how do we fix the broken performance review? If that is your chief question, the HR Magazine article offers several good suggestions for making the experience less painful. However, I don’t believe that question gets to the heart of the issue. I encourage leaders to instead ask themselves, “How can we more effectively deliver helpful feedback that motivates employees and drives results?”
When the focus shifts beyond repairing what’s broken to helping employees thrive, we can begin to develop more effective systems and practices.
ADI’s performance matrix offers a customizable solution that effectively combines measurement, feedback, and positive reinforcement without the headache of the performance review. The performance matrix helps clarify what success looks like for each unique role and offers flexibility to accommodate changing business priorities. Contact an ADI consultant today to get started.