Five reasons your performance review system sucks

If there’s any corporate tradition more maligned than the annual performance review, I’m hard pressed to find it.

Managers hate doing reviews so much, many just don’t. A recent survey by Ceridian reported that in 2012, only 59% of respondents had had a formal sit down with their manager to discuss performance.

Oh my.

Well, I believe it’s high time for the annual review to get its proper due, rather than being disparaged as a pointless hurdle that nonetheless must be jumped before employees can receive pay increases. With that attitude, it’s no wonder your performance review system sucks.

That’s not the only reason, of course. Here are five others.

  1. It’s Nonexistent
    You have no system to speak of. Some employees receive reviews, and some don’t. Some employees receive reviews on time, but other employees have managers who are always late. Some managers use a form they picked up from who knows where, while others prefer to prepare reviews “freehand.” There’s simply no rhyme or reason to your “system,” and it’s not helping to maintain managerial “autonomy,” either. It’s just a chaotic, hot mess. As a result …
  2. Nobody Takes It Seriously
    Just about everyone in your entire organization (with the exception of a handful of newbies) knows that your performance reviews don’t matter. Not only are they frequently not prepared or prepared weeks and sometimes months late, but they contain information that is inaccurate, confusing, or otherwise useless. Employees don’t provide input and aren’t terribly invested in the process, and managers rarely follow up on the few goals that might make their way into the documents.
    However, this isn’t terribly unexpected, because …
  3. You Don’t Have a Strategic Plan
    Without a written strategic plan that’s been communicated to staff, it’s extremely difficult if not impossible to project how employee performance will impact your organizational goals. And if you haven’t decided in advance what specific actions are needed to meet company goals, then you’re seriously compromising your ability to meaningfully evaluate employee performance. Think of it this way. It may be true that Johnny baked a marvelous cake—but what you really needed was a bowl of chili. And so Johnny gets a great review (and he should, because he did good work; in fact, he did exactly what he was supposed to do, as far as he’s concerned), but what did you get?
  4. It’s Just Not SMART
    Provided that some goals have sneaked their way into your performance reviews, the goals aren’t SMART. In other words, the goals aren’t Specific, Measurable, Attainable, Relevant, and Timely. What good is a goal that can’t be measured or doesn’t have true relevance to your organization? You don’t have to answer that. Bottom line …
  5. It Doesn’t Drive Performance
    The harsh truth is that your system has no impact on performance. And that, my friend, doesn’t prove that performance reviews are useless. It only proves that yours probably are.Still, it’s an inescapable fact. here is no better method for communicating your expectations and desires to employees than by telling them. If you aren’t telling them, how are they to know?

    Believe it. Employees want to know. They want to know when they’re doing a good job, how they can improve and do an even better job, and how they can position themselves for the best assignments and promotional opportunities. Granted, no one likes hearing that he’s doing a lousy job, but hey, it comes with the territory.

Here’s the good news. It’s never too late to revamp your process into something that actually helps managers and line staff to do their jobs better.

And let’s face it. Even a bad performance review system takes time and energy to maintain. How is that good ROI?

Related: Strengthen the Link Between Pay and Performance

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