It's been the hot HR story of the summer. The headlines are all over the business pages. Numerous large companies, like Deloitte, Gap, Adobe and others, are jettisoning everyone's favorite whipping boy: the annual employee performance review.
I'm here today to offer a contrarian opinion. A contrarian view of the value of the management tool known alternately as the "dreaded annual performance review" ("dreaded" usually seems the descriptor of choice) and "that worthless corporate ritual." My premise: The real problem isn't the annual employee review itself. It's management. It's the way annual reviews are all too often administered.
If managers aren't selected and trained properly, or don't set clear job objectives or provide meaningful regular feedback, then yes, I guarantee the end-of-year review will be a problem. More likely a train wreck.
But in such instances is the problem really the message (the review itself) or the messenger (the manager)? I'd say the latter.
A little quick background: I was in Fortune 500 company management for 24 years. During that time I received 24 annual reviews and gave over 100. (Actually closer to 50 and 200 close if you counted our mid-year reviews, which were also formal... but for these purposes we're discussing just the year-end variety.) Were all of them perfect? By no means. I was unhappy with some that I received, and I know that with some I gave I could have done a better job. No doubt. But, on balance, did they seem to me a reasonable macro-level tool to assess performance and help the organization make compensation and promotion decisions? I believe they were.
No one says management is an easy job. In my own management career, when employees were unhappy with the reviews I gave, the issue usually was that I hadn't been candid enough about specific performance problems during the year. It's very tempting to avoid tough performance and behavior conversations (any manager will tell you that!). But in those cases the fault was mine - it was a management issue, not a review issue. (Occasionally employees had unrealistic views of their own year-long performance and we'd disagree at year end, but in those instances, so long as I'd been forthright throughout the year, I never regretted doing what I needed to from a management standpoint.)
A year-and-a-half ago ago I did a blog for FORBES titled, "3 Simple Questions To Help Ensure Effective Employee Evaluations." Back then, this annual-review issue was starting to bubble to the surface nationally, so I thought an article of this nature could be useful. The three simple questions - which were meant for a manager to ask himself or herself - were:
1. Are your employees' objectives clear and measurable?
2. Have your employees' results been well-documented throughout the year?
3. Have you provided regular consistent feedback throughout the year?
My point was that if the answer to any of these three questions was a resounding “no,” that was a management red flag. It indicated there were substantive management/communication problems… and it was time to quickly get one's managerial house in order, or there likely would be annual review troubles later when the time came. But again, the review isn't actually the cause of problems - it's merely the symptom. The real causes in the example I've outlined are failures to set clear objectives and provide clear meaningful feedback - both basic, core management functions.
If there's one common thread I've noticed in the ways companies seem to be addressing the current widespread dissatisfaction with annual reviews, it's their desire to establish mechanisms so that feedback is provided more frequently. I'm in total agreement with that. By all means. Feedback is vital and necessary. Isn't it a key role of management? Of course. Which is why I maintain that at its essence this is really a management selection and training issue. With national employee engagement numbers persistently hovering around the 30% level, there's broad need for good managers. Managers who communicate, who set intelligent business goals and hold their employees accountable to them.
If all that clear logical goal-setting and feedback-providing occurs, then annual employee reviews are nothing dramatic at all. Just a simple end-of-year conversation reviewing performance that has already been discussed thoroughly by manager and employee in preceding months.
With no surprises. Just as it should be.
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Victor is author of The Type B Manager: Leading Successfully in a Type A World (Prentice Hall Press).
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