Why Performance Reviews Don’t Work

Like a lot of measures that are well-intentioned but ultimately dysfunctional, performance reviews started in government. Feedback as a tool to improve performance is much older. However, in the United States, it was the Performance Rating Act of 1950 that enshrined an annual feedback ritual across departments of the federal government. 

At the time, the idea was noble. Government workers weren’t getting much of any feedback or recognition, so the law required agencies to provide that feedback at least once a year….which quickly became only once a year.

Organizations in all sectors soon followed suit, and the annual performance review became the norm just about everywhere. Since then, there have been all manner of attempts to improve the review, from software tools to rating methodologies. 

But none have seemed to offer much of an increase. Organizational Psychologist and Stanford professor Bob Sutton offers perhaps the best verdict on performance reviews. He once told the New York Times, “If performance evaluations were a drug, they would not receive FDA approval. They have so many side effects, and so often they fail.”

In this article, we’ll examine the reasons they so often fail. We’ll outline some practical steps you can take to offer feedback to your team that actually helps them grow and improve.

Reason 1: Too Late

The first reason performance reviews don’t work is that they’re too often too late. Like in government, when you’re only documenting performance and offering feedback once a year, you’re too late to make any meaningful changes in performance. 

Feedback has an expiration date. It’s most potent when given immediately after behavior was observed, and it loses its potency the longer it’s delayed.

In addition, when performance reviews are conducted annually (or even semi-annually), they often suffer from a recency bias. Managers and employees both come to the discussion with only the past few weeks or months fresh in their minds. 

That’s okay from a feedback perspective (because feedback has an expiration date), but if ratings, raises, or promotion opportunities are tied to that performance review, then the review itself isn’t fully capturing an employee’s accomplishments. That can lead to dissatisfaction with the review process and disengagement with the job overall.

Reason 2: Too Generic

The second reason performance reviews don’t work is that they’re too generic. In most organizations, employees are evaluated across four or five key categories—often the same categories for every employee in every job. 

You have your industry standards “Collaboration,” “Initiative,” “Teamwork,” and “Job Knowledge.” But, there is very little insight into how those categories compare across jobs. Job Knowledge might be important to every role, but isn’t Communication a bit more important to some roles than others? How much overlap is there between communication and teamwork? Isn’t communication a vital element of Teamwork?

Beyond just generic categories, the ratings themselves are fairly generic. When you look at the descriptions, it’s difficult to tell the difference between “Superior” and “Excellent” or between “Meets Expectations” and “Excellent.” 

We don’t want a “Meets Expectations” in categories like “Ability to take Initiative.” Exceeding expectations would imply the employee is taking on extra work that wasn’t assigned, which sounds great unless they’re taking on work that doesn’t need to be done. 

Trying to fit the complexity of many jobs into a few broad categories almost always makes those categories too generic to be effective for feedback.

Reason 3: Too Subjective

The third and final reason performance reviews don’t work is that they’re too subjective. The feedback given is also influenced by the opinions of the manager who filled out the form and ran the conversation. 

On the surface, that sounds fine. We have our own biases, and we tend to outweigh our contribution, so getting feedback from someone other than ourselves is useful. But that person has their own biases. 

They have their own opinions about how work should get done. As a result, performance reviews often become exercises in learning how the manager did it back when they were an individual contributor and how you should strive to be like that manager.

But you are not your manager. You have a different set of knowledge, skills, and abilities, as well as a different collection of strengths and weaknesses. So, how you approach problems will be different from how your manager approaches them. A little perspective on how others work is fine; telling others how to work in every situation can lead to disaster.

Performance reviews don’t work as intended for these three reasons—too late, too generic, and too subjective. But what kind of conversations should leaders have with their team members to fulfill the intention of performance reviews? 

Perhaps the best model to follow would be Adobe, which, nearly a decade ago, abandoned the performance reviews in favor of training leaders on how to hold regular “Check-In” conversations.

But these aren’t the check-ins many leaders have with their team. It’s not a quick phone call to see how projects are coming along. Instead, Adobe uses a highly structured, three-phase model for their check-in conversations: Expectations, Feedback, and Development. 

The conversation starts with reviewing past expectations and setting new ones, and then managers and employees give each other feedback on how they’re progressing against the expectations. Lastly, the conversation shifts to the employee’s own development goals and how the manager can help assign tasks that aid in their development. 

These conversations are often held off the record to maximize the honesty of both parties.

Check-ins happen regularly, so they’re not too late. They are specific to the employee’s expectations, so they’re not too generic, and they’re a two-way conversation, so they’re not too subjective.

You may not have the ability to scrap performance reviews in your organization. But you can hold regular, structured Check-Ins with your team (you might even get credit for exceeding expectations on Initiative on your own performance review). If you hold these honest, off-the-record conversations honestly, then the form you must fill out once a year becomes just another conversation. 

At the same time, the feedback you’re giving your team is more immediate, more specific, and more objective. That will help everyone on your team do their best work ever.

Tips for Effective Performance Reviews

Here are some tips that we can use to make your performance reviews more effective and specific for your employees as well.

Continuous Feedback

Replace semi or annual reviews with frequent check-ins. Make it quarterly or even monthly if you can make it work. Continuous feedback will allow you to address issues and celebrate achievements on time, improving employee engagement and performance.

Develop Don’t Just Evaluate

Instead of focusing on evaluating past performance, talk about the future goals and development opportunities for your employees. Employees will feel more valued when the reviews contain actionable steps for their growth.

Talk about future opportunities and training to develop specific skills and make efforts to keep the employees motivated.

As per a survey by Deloitte, future focus performance discussions result in a 25% increase in employee engagement. So, the reviews will help you as a company and also keep your employees engaged and loyal to you.

Personalize the Review Process

Instead of generic reviews, personalize the review process specific to each employee’s role and responsibilities. 

When you give specific feedback pinpointing the key areas where they need improvements, the employees will relate more to it and or be more likely to improve. So, different KPIs for each individual should be set, and the process should be personalized for each employee.

Give Constructive Feedback

Train Your managers to give specific, actionable and constructive feedback. 

When you give constructive feedback, employees don’t feel the need to defend themselves. It ensures the employees are in a safe place and are only being taught how to improve. A study shows that 92% of employees agree that constructive feedback improves their performance only when delivered effectively. 

So, instead of criticizing or demeaning others, always spread the positive word and give constructive feedback.

Encourage Employee Input

Make your employees a part of the review process by asking for their feedback on their roles. Make it a two-way dialogue or a communication process which will build trust and ensure that the feedback stays relevant to the employee’s experience.

Make Reviews Goal-Oriented

Always ensure that the feedback is specific and tied to the measurable goals of the organization. In this way, you will give the employees a direction to focus on so they can focus their efforts in the right place, which will help you achieve the organization’s key objectives.

Wrap Up

Traditional performance reviews are no longer effective because they are quite generic and subjective. 

Instead of improving performance, they can lead to a lot of frustration amongst the employees and make them disengaged. There’s a dire need for the feedback to be more personalized. The focus should be on the development of the employees. In this way, you can transform performance management into a tool that supports the employees.

The idea of entirely eliminating performance review is not feasible, of course, but integrating modern practices can bridge the gap and make it more relevant and impactful, creating a culture of continuous improvement.

HOME_AboutDavidBurkus

About the author

David Burkus is an organizational psychologist, keynote speaker, and bestselling author of five books on leadership and teamwork.

6 thoughts on “Why Performance Reviews Don’t Work”

  1. This was very insightful. Thank you. I’m on the front end of a (I fear pointless) performance evaluation cycle at work and while this won’t improve this year’s outcomes, maybe the Adobe model can serve as a starting point for next year.

    Thanks again.

  2. Have you ever noticed or experienced performance reviews being weaponized to prevent employees from making career advancement? That is how I feel about my current job. I have no idea how to mention it without fear of reprisal. Maybe I’ll anonymously share this article……

  3. Great summery of what is and can be…Thanks
    It’s amazing how few organizations really understand each employee’s expected contributions are to the future success of their organization. Consequently the phases of setting Expectations, getting Feedback and planning Development become misguided resulting in frustration and less than optimum performance and success.

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