Annual Performance Reviews are Worthless

Performance Reviews are WorthlessAh, the annual performance review, a ritual of awkwardness for managers, torture for employees, and hassle for HR. It’s the time of year also known as “Creative Writing for Business Professionals.” It’s where we dust off our thesauruses, embellish our accomplishments, and make our year surfing the Internet sound like we’ve accomplished something productive.

Managers struggle to give effective feedback. Employees sit in silence learning what their boss really thought of them during the year. In the end, the employee ranks a three out of five, just like most others in the company.  But it’s no one’s fault. The company instructs managers to give no one a five and give a four only with Vice President approval. Since managers don’t want to get on the VP’s radar, whether for good or bad, they simply give threes and move on.

Since 2008, more organizations have been on a mass layoff schedule than an annual merit increase. For those not laying off, they have done away with merit increases tied to annual performance appraisals. Employees, forced to still complete the annual performance review, spent as much time on them as was proportionate to their expected merit increase – not much. Now, as companies begin to recover, some are adopting blanket merit increases, not tied to employee reviews at all. Again, employees are getting smart. If everyone is going to get a standard merit increase, why waste time doctoring a performance review? So it begs the question…

What if there were no annual performance reviews?

Modern psychological and business research continues to point to the meaninglessness of annual performance reviews. Most studies show that they tend to be more detrimental to an organization than to “achieve a high-performing team,” as most CEO’s expect.

What if feedback, instead of given annually, was given at the time of the action, whether good or bad? What if managers were actually trained in coaching and providing feedback? Could better team performance result? What might the work environment look like?

Think of a startup. Do you move from “startup” to “business” when you burden your staff with the annual performance review?

Wouldn’t life be grand without the annual performance review?

What if you wrote your own performance appraisal? What if it wasn’t tied to a merit increase? What if it was an open, honest conversation with yourself? What if you changed the conversation from one between you and your boss to one where you shared your results with your peers? What if they had an opportunity to provide feedback?

What if there was less scoring and more writing? We like our reviews boiled down into compact, neat little numbers. What if we had an environment measured in sentences?

Ultimately, performance comes down to intrinsic motivation. If you want a “high-performing team,” find out what motivates them and give it to them. This involves mutually setting goals, focusing on results, and providing autonomy for the employees to get the job done.

Better than Average companies eliminate the annual performance review and provide feedback and coaching throughout the year.


Why are you still using an annual performance review?


For the awesome first chapter of the forthcoming book Better than Average: Excelling in a Mediocre World, send an email to me and you score it for free!


Todd Brockdorf
Better than Average Guy
Author, Speaker, Consultant
[email protected]

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