You’re Doing It Wrong: Why Performance Reviews Are So Ineffective

Performance reviews tend to invoke a sense of dread, apprehensiveness, and wariness in even the most adaptable employees. In fact, managers dread it just as much, considering the amount of paperwork, deliberation, and planning it takes to provide a comprehensive evaluation of every employee’s overall performance for the entire year.

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Despite everything, it would seem that all of that stress, effort, and dread is for naught. Recent data has shown that traditional performance evaluation systems are largely ineffective. Adobe, for one, found through its surveys that:

• It has “no impact on how people do their job.”
• It makes people quit or leave for another job
• Ranking people against their team members exacerbates favouritism & office politics
• Managers spend too much time (17 hours) per review

Clearly, it’s time to move on to a more agile way of reviewing performance; one that helps employees keep up with the sheer dynamism of our times. Here’s how.

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1. Frequency

By far, the biggest reason why performance reviews fail to have their desired effect is that they’re far too infrequent. For real growth to occur, however incremental, it has to be supported with regular feedback sessions. Keeping it to one or two reviews for the entire year leaves very little room for adaptability. What generally happens for the rest of the year is:

• People don’t know how well or poorly they’re doing at work
• They only become more productive when performance reviews are just around the corner
• They don’t get enough coaching and support from their managers

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When monitoring your own progress towards your personal goals, frequent self-evaluations are indispensable. They let you know if you’re on the right track, need to change your whole strategy, or just make some adjustments in the right places.

Managers should apply similar logic to giving performance reviews:

• Have regular check-ins
• Make performance evaluations a business-as-usual practice instead of a rarity

Gap, for example, requires its managers to hold monthly discussions with every employee about their performance. At Adobe, managers are required to have at least one feedback conversation with each employee every quarter.

2. Tone

Don’t finger-point

Making performance reviews more frequent might intimidate your employees at first. It’s crucial, therefore, that you make it clear that the intention here is to support growth, not to find faults.

Indeed, performance reviews that are characterised by finger-pointing tend to make employees self-defensive. When this happens, they’ll be more focused on finding reasons to reflexive rejecting feedback instead of taking it in for careful consideration.

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Informality

Additionally, it’s essential to shift the tone of performance reviews away from formality. This can go a long way in helping people to feel more at ease, thus facilitating receptiveness instead of self-defensiveness.

For instance, Netflix holds “real-time 360” team dinners meant for employees to openly give one another feedback for improvement. The rationale is that people can’t meaningfully change if they don’t know what they need to change.

Similarly, Adobe’s performance management system does away with formal documentation, ratings, and rankings in favour of dialogue and feedback conversations.

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Stop focusing on lead measures

Instead of focusing exclusively on outcomes, consider looking at measuring the precise behaviours you want to encourage that will help produce those outcomes.

In the bestselling book “The 4 Disciplines of Execution,”, the authors explain that managers tend to measure success based on “lead measures.” These simply show whether or not certain desired outcomes were achieved.

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To provide a more specific and useful framework for employees to gauge themselves by, managers should instead “measure the new behaviours that will drive” desired outcomes.

For example, if the desired outcome is to increase customer satisfaction, then managers should look at the number of customers who receive free samples.