Leon Gettler has a post about performance reviews on The Age blog. It struck a chord. I’m not the greatest fan of performance reviews. I don’t think I’ve ever had one which has been helpful. Most of the time, they have been “rubber stamp” affairs, with bosses ticking various boxes just so that we can say that we’ve gone through the process (thus keeping the HR department off our backs).
Gettler cites a study by Personnel Decisions International (PDI) which found that, where employees report to multiple bosses, the employees’ performance ratings were inconsistent, and sometimes bosses gave wildly varying ratings.
In a study of 5,970 employees reporting to two bosses, employees who were rated “Outstanding – one of the best” by the first boss, were rated lower by the other boss 62% of the time and only “Somewhat above average” or less 29% of the time.
“Unfortunately, the concept of rater bias is something that almost every company encounters,” explains Brian Davis, executive vice president, practice areas at PDI. “This basically means that bosses are rating employee performance through their own biases. Some bosses tend to rate employees on how well they like them, rather than how well the employee performs. Other bosses tend to have their own rating systems where, for example, they rate everyone well. The problem with rater-bias is that it takes away the organization’s ability to objectively use data from performance evaluations with any validity.”
Apparently part of the problem arises when performance assessments do not address specific competencies or criteria.
“When two bosses are involved, it is crucial to use common standards for rating employee performance,” Davis continued. “By knowing which skills and competencies are important for the work and what types of behaviors constitute an ‘average’ rating compared to an ‘above average’ rating, for example, the entire validity and value of performance evaluations greatly improves.”
“When standards are not used, you can’t count on the objectivity or accuracy of a performance assessment and you have no differentiating data that allows you to make confident decisions about promotions, training or leadership development,” Davis continued. “Today’s best companies simply cannot leave their talent management decisions to chance. They need to know that the time and effort put into performance evaluation have a return on investment of making better talent management decisions.”
Even if there are standards, some performance criteria are useless. What does “communicates well” mean? “Communicates well” with whom? Clients, co-workers or bosses? I’ve spoken before about the problem of people who are very good at managing upwards (communicating with their bosses) but may be very bad at managing downwards. Nonetheless, because it is the boss’ impression which counts, these people move on up in an organisation, even when their bad management style leads to massive attrition. “Must be the junior employees’ fault – no backbone or loyalty,” think the ultimate bosses or partners.
The problem is that promotions and salary increases may depend on these ridiculous exercises. Bad practices can filter through the whole organisation. If you see someone promoted on the basis of personal friendship, despite the fact that he or she is not qualified for the job, it is absolutely demoralising. You begin to wonder what you are doing at the organisation or firm.
It has always seemed to me that if your manager is competent, you don’t need to have a performance review. You have an idea of how you are performing and what your duties are. You know whether you are likely to progress and that your work is appreciated.
Unfortunately, real life ain’t like that most of the time. It’s probably good to force people to think about how they manage their junior employees, as well as giving junior employees a chance to tell management of any problems. But I think that the “check the box” performance review is a poor way of doing it.