Appraising the performance review: Broken but not beyond repair

Maybe the boss is too busy to notice an employee’s work. Maybe the employee doesn’t take criticism well, so the boss glosses over deficiencies. Maybe the review process is tied to legacy systems and needs revamping – or, as at least one author suggests, the review should be done away with entirely.

Either way, some workers aren’t seeing value in performance reviews. CFOs, in a recent Accountemps survey, overwhelmingly rated reviews favourably, with 94% saying they were effective. Sixty-two per cent of workers surveyed felt the same way, but 31% called reviews ineffective.

Another survey, completed last fall, links poor reviews to employee turnover. The survey says that just 37% of workers reported receiving useful feedback from their manager or employer.

“Managers who simply go through the motions with performance appraisals not only risk employee retention but also limit the success of the business,” Adam Miller, the CEO of Cornerstone OnDemand, which compiled the survey with Harris Interactive, said in a news release about the survey. “Performance management should be about developing employees to help them succeed and stay aligned with the goals of the organisation.”

 Two Robert Half International executives, one each from the UK and US, offer five tips to improve reviews. Neil Owen is global practice director, based in London. Brett Good is senior district president, based in California.

1. Planning the review is critical: There’s little worse than a hastily called meeting about a review, just because a deadline is approaching. Also annoying to the employee: the unprepared boss. To start a review on the right note, “the meeting is booked in advance, and it’s explained what the process looks like,” Owen says. “The employee is given time to prepare.” If the employee is new, time should be devoted in advance to explaining the performance management systems as well as follow-up processes.

2. Make it a 50-50 conversation: The review should not be about the manager’s agenda. The employee should be doing a fair share of the talking. “It’s got to be a 50-50 conversation,” Owen says. “The manager should go into the conversation with the belief that it is as much about the employee, how they think they can improve, how they interact with the manager. There’s a technique to that. (Managers) need to be able to listen and to seek feedback themselves.”

3. Subjectivity, yes, but also hard numbers: A supervisor’s judgement is always part of a review, but steps can be taken in advance to limit that and evaluate the employee objectively. Specific, measurable goals should be in place. Instead of “improve customer service,” for example, a goal could read, “reduce the number of customer complaints by 20%.” “There’s got to be a portion you can quantify,” Good says. “There are different aspects that can be quantified and metrics that can be set.”

4. It’s a review; keep it that way: This ties in to the 50-50 conversation tip in that the boss should not see the review as a moment to “fix” the employee. If training is needed, it should be set up separately. “It’s a chance for both parties to (review) the performance,” Owen says. “It shouldn’t become a coaching meeting.”

5. No zingers: Surveys have shown that employees are often surprised by what they read in their reviews. “The manager will sometimes sneak in the zinger that is news to the employee,” Good says. “If someone’s bringing up something that happened six months ago, it’s no wonder why the employee feels it has little value.” The annual review meeting and appraisal document should be the end point of an ongoing conversation.

Another view on reviews

Sam Culbert, a professor at the UCLA Anderson School of Management, wrote the book Get Rid of the Performance Review with Larry Rout. Culbert’s take on reviews hasn’t softened since the book was published two years ago. In fact, it’s gotten stronger as he’s talked to more executives.

“I’ve encountered so many people, top-tier managers who acknowledge that (reviews are) all baloney and they haven’t done anything about it,” Culbert says. “It’s a house of cards that should be blown over.”

Culbert believes reviews destroy trust between boss and employee and erode teamwork. His solution: Do away with reviews and create a “performance preview,” where manager and employee can talk honestly about their strengths and weaknesses and work together for the good of the company, not the reaching of the supervisor’s goals.

“Performance reviews are organisationally constructed obstacles to people being their best,” he says. “Management’s job is removing obstacles to having people be at their best.”

—Neil Amato (namato@aicpa.org) is a CGMA Magazine senior editor.