No more performance reviews: why they don’t work

June 20, 2018

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Having your performance assessed can cut both ways. The good side: you get potentially valuable feedback and an understanding of what you should improve. The bad side: it’s a stressful procedure with possibly demotivating effects. Traditional annual performance reviews have been around since the 1970s and they’re time-consuming, stress inducing and poor on feedback.

A number of recent studies show that reviews don’t usually have the positive results that were intended to. Let’s take a closer look.

Once a year is not enough

Being assessed once a year means that too much focus is placed on the assessment itself. The review is supposed to give employees valuable insight into what they should work on and improve, but instead it becomes subject to distracting anticipation and can cause unhealthy competition around the office, and productivity can suffer. Employees are more anxious about getting top marks than concentrating on opportunities for improvement and growth. Not to mention that once a year is too large a gap for managers to provide unbiased and on-point feedback to employees.

A rigid structure does not mean effective

You would think that marking your employees according to a generic system of evaluation would give a clear picture, but this is really a simplification of reality and has counterproductive effects. Loyalty is a key factor in employee performance, and impersonal, highly formalized evaluations do not promote this in any way. Being assigned a mark between 1 and 5 will not boost an employee’s sense of belonging to a team. So it’s no wonder that in a study conducted by Adobe, 30% of respondents claimed they quit their job on learning the result of their performance review.

Reviews don’t drive positive change

Treating people as objects that can be measurable not only estranges them from their workplace, it also conceals the important fact that employee performance depends on the employer’s ability to motivate, guide, coach, support and inspire their employees. Recent studies stress the importance of continuous feedback, as well as of mutual discussion: preferably informal and undocumented.

This one-way mindset is gradually being left behind: companies come to an understanding of the importance of their involvement in improving each employee’s performance. The new role of managers is to unlock the potential of their teams, not act as a referee on the sidelines. A bit of a human touch is all it takes.

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