Business Week Gives Performance Reviews Low Grades

You may have guessed that we’re not huge fans of the old school performance review process: there’s lots of value in doing reviews at the end of the year, but the 364 days in between leave people without anything to work from. It’s always nice when experts agree with you, so it was with great delight that we came across Jeffrey Pfeffer‘s article Business Week: Low Grades for Performance Reviews. Pfeffer is the Thomas D. Dee II Professor of Organizational Behavior at Stanford University’s Graduate School of Business, so he knows a thing or two (hundred) about this stuff.

Professor Pfeffer presents a good list of reasons performance reviews don’t actually review:

• Managers who hired specific employees give them higher scores when reviewing them later
• Gender and race affect outcomes, with employees who share a manager’s socioeconomic background scoring higher
• Reviews tend to reflect employees’ ability to suck up to the boss for jobs that are harder to assess (R&D, management)
• They don’t provide useful or timely feedback that people can use to improve
• The focus on individuals masks bigger reasons companies may not be successful (e.g.: inferior technology)

So how do we fix this mess?

What should you do if you’re locked into performance appraisals for now? To reduce supervisor bias, make evaluation criteria more explicit and objective and involve more people in each review. Encourage managers to have frequent, ongoing conversations with their staff about performance… Annual reviews rely on hazy recall, with managers remembering recent events and overlooking what was done earlier in a review cycle.

Call me crazy, but that sounds a whole lot like using Rypple. Give it a try if you’re stuck in the mid-year performance review doldrums!