5 Minutes on Why We Should Drop Annual Performance Evaluations

We have known for a long time now that annual performance evaluations don’t actually help with performance.

In fact, most managers and employees are dissatisfied with their performance review systems.

We don’t trust them to deliver accurate information about employee performance. And the results aren’t helping our employees feel inspired to improve.

I could really get into the weeds here, but let me just give you a few reasons to considering letting this practice go.

Performance evaluations are filled with biases.

Here a just a few examples of the ways bias can show up:

1. It’s common to attribute excellent performance to external factors and poor performance to employee behavior.

2. Supervisors tend to rate employees higher when they share similar values or interests with the supervisor.

3. Evaluations can also be biased based on previous evaluations of the employee. For example, you may be evaluating an employee who is not performing well, but a previous supervisor only gave them positive evaluations. A change in their performance evaluation can feel abrupt and actually create confusion for the employee.

Performance evaluations are prone to errors.

Here are a few examples of errors that can show up:

• For systems that use ratings, sometimes supervisors focus only on middle ratings.
  

• Supervisors can be inconsistent in how they rate from evaluation to evaluation, and different supervisions can be inconsistent in how they rate the same employee.
  

• Supervisors can also evaluate using too few examples or only considering the recent past.
  

• An outstanding or problematic quality can become the focus on the evaluation, making the evaluation too narrow in scope and not representative of the employee’s performance as a whole.

Performance evaluations can focus too much on paperwork.

Organizations often have an unexplored belief that they need to keep official record of employee performance. This can create a situation where the performance evaluation becomes more about paperwork than it is about improving performance. Not only does the annual review process often not help to improve performance, but the official record is in many ways an inaccurate description of the employee (because of errors above).

Maybe some of these issues feel familiar or are helping you put your finger on what has felt off.

Maybe you are feeling more ready to let go of this practice.

In the next post I’m going to introduce you to an alternative system called Performance Learning.

Shifting from performance evaluation to performance learning doesn’t have to be a heavy lift. But it will involve a shift in your organizational culture.

Are you ready? What are your thoughts on performance evaluations?