Performance management has long been a major challenge for human resource professionals and managers alike. Surveys (e.g., Corporate Executive Board (CEB1), Society for HRM2) find that over 90% of managers are dissatisfied with the way their companies conduct performance reviews and employees, even when motivated to learn, do not respond well to negative feedback3.
“Antiquated”, “bureaucratic”, “top-down”, “demoralizing, “demotivating”, “un-empowering”, “like a visit to the dentist” and similar descriptions abound. “As toxic for innovation, integrity and morale as media reports made it out to be and then some”, a former employee of Microsoft said of the forced ranking feature of that company’s performance management system, which has since been eliminated4. Performance management is variously described as costly, onerous, time consuming and adversarial, inhibiting collaboration, increasing internal competition and dramatizing office politics. It is further blamed for highlighting extrinsic rewards over more motivating intrinsic rewards, such as creating value and meaning at work. It is accused of discounting the manager’s role, especially when it involves forced distributions. Traditional performance management is described as backward rather than forward looking with the annual review in particular being prone to recency bias. Another failing is the tendency to have one system for very different jobs and work settings based on the misconception that there is one “best” way to do performance management.
Many observers suggest that a radical retrofit of performance management is in order and some go so even further to suggest that it be thrown overboard entirely, like S. A. Culbert in “Get Rid of the Performance Review” 5.
1. Accenture CEO explains why he’s overhauling performance reviews. Lillian Cunningham, Washington Post, July 23, 2015.
2. Abolishing performance appraisals. Amin Palizban, 7Geese, November 7, 2011.
3. Performance appraisal satisfaction: The role of feedback and goal orientation. Culbertson, S. S., Henning, J. B., & Payne, S. C. Journal of Personnel Psychology, 2013, 12(4), 189-195.
4. With Steve Ballmer’s departure, a look at Microsoft’s flawed system of performance reviews, Washington Post, Jena McGregor, August 27, 2013.
5. Get Rid of the Performance Review!: How Companies Can Stop Intimidating, Start Managing–and Focus on What Really Matters. Samuel A. Culbert, Lawrence Rout, 2010, Business Plus.