Get Rid of the Performance Review!

1. Performance reviews are fundamentally flawed and counterproductive

It's time to finally put the performance review out of its misery.

Reviews damage relationships. Traditional performance reviews create an adversarial dynamic between bosses and subordinates. They focus on finding faults and placing blame rather than solving problems collaboratively. Reviews make employees defensive and reluctant to be honest about challenges they face.

One-sided evaluations are ineffective. Having the boss unilaterally judge the subordinate's performance ignores the reality that results come from teamwork. The boss's role in supporting (or hindering) the subordinate's success is overlooked. This prevents identifying systemic issues or opportunities for the boss to improve.

Annual reviews are too infrequent. Waiting for an arbitrary date to discuss performance issues allows problems to fester. Effective management requires ongoing dialogue and course-correction throughout the year as situations evolve.

2. Reviews create fear, stifle honesty, and undermine teamwork

With performance reviews, there's not a prayer of give-and-take here, no conversation, no straight talk.

Fear inhibits honest communication. Employees are reluctant to admit mistakes or weaknesses, knowing these will be documented and potentially used against them later. This prevents learning and improvement.

Comparative rankings breed competition. Forced rankings and bell curve distributions pit employees against each other. This discourages collaboration and knowledge-sharing that would benefit the company overall.

Short-term thinking prevails. Employees focus on looking good for the next review rather than long-term results. They may hoard information or undermine colleagues to boost their own standing.

3. The illusion of objectivity in reviews masks subjective biases

Put bluntly, I find it illogical to assume that any person's assessment of another person is independent of that evaluator's motives in the moment.

Subjectivity is inevitable. No matter how standardized the review process, the boss's personal biases, preferences, and self-interest inevitably color their evaluation. Pretending reviews are objective is dishonest and prevents addressing these biases.

Metrics can be manipulated. Numerical ratings create a false sense of precision. In reality, they often reflect the boss's overall feelings about an employee rather than truly objective measures. Ratings are easily skewed to justify predetermined outcomes.

One-size-fits-all criteria are flawed. Standardized evaluation criteria fail to account for different roles, working styles, and individual strengths. They force square pegs into round holes instead of leveraging each person's unique talents.

4. Linking pay to performance reviews is misguided and demotivating

The sad fact is that pay and performance don't really have much to do with each other, and pretending to lump them together is a needlessly stupid, alienating ritual.

Market factors determine pay. Compensation is primarily driven by external market rates, not individual performance. Pretending otherwise creates false expectations and resentment.

Money doesn't motivate. Beyond a baseline of fair compensation, additional pay does not significantly improve motivation or performance for most knowledge workers. Intrinsic motivation from meaningful work is far more powerful.

Pay discussions distort reviews. When reviews determine raises, employees focus on impression management rather than genuine improvement. Bosses may sugarcoat feedback to avoid hurting morale. This prevents honest dialogue about performance.

5. Reviews fail to achieve accountability or drive improvement

Valid evaluation requires that companies not only do away with the performance review, but also demolish the whole thinking that allows it to exist, the flawed foundation upon which it rests.

Flawed premises lead to flawed outcomes. Reviews assume the boss knows best how to evaluate and improve performance. In reality, the employee often has more relevant knowledge about their role and how to excel in it.

Feedback is ignored. When criticism comes in an annual, high-stakes review, employees are more likely to become defensive or demoralized than to internalize the feedback and improve.

Root causes are overlooked. The review format encourages blaming the individual rather than examining systemic issues or the boss's role in enabling high performance. This prevents meaningful organizational improvement.

6. HR departments perpetuate reviews to maintain their power

Take away the performance review and the HR department is back where it should be: supporting management rather than supplanting it and terrifying it.

HR's conflict of interest. Performance reviews give HR departments power and relevance in the organization. This creates a strong incentive to maintain the flawed system despite its negative impacts.

Focus on process over results. HR tends to emphasize compliance with review procedures rather than whether those procedures actually improve performance or business outcomes.

Misaligned incentives. HR is often evaluated on implementing review systems, not on whether those systems drive better results. This leads to perpetuating ineffective practices.

7. Performance previews offer a superior alternative focused on results

The goal of the performance preview shouldn't be to get the employee to think as the boss thinks, to operate as the boss operates. The goal isn't to get the subordinate to change in a way that makes the boss's life easier. The goal is simply this: To improve the bottom line of the company.

Future-focused dialogue. Previews emphasize discussing how to achieve future goals rather than critiquing past performance. This creates a more constructive, problem-solving mindset.

Mutual accountability. Both boss and subordinate are responsible for achieving results together. This encourages collaboration and prevents scapegoating.

Ongoing conversations. Previews happen whenever needed, not on an arbitrary annual schedule. This allows for timely course-correction and support.

8. Previews foster open communication and joint problem-solving

In reviews, the question is always "How are you doing in pleasing me?" In previews, it's "How are we doing together in getting the company what it needs?"

Psychological safety. When employees aren't fearing negative consequences from reviews, they're more likely to admit challenges and seek help. This allows addressing issues before they become major problems.

Leveraging diverse perspectives. Previews encourage both boss and subordinate to share their unique insights. This leads to more innovative solutions than the boss dictating answers.

Alignment on priorities. Regular preview discussions ensure both parties are working towards the same goals and have a shared understanding of what success looks like.

9. Big bosses must actively monitor and support boss-subordinate teams

With the preview, the big boss has to monitor two issues: company results and the boss/subordinate teamwork.

Oversight prevents collusion. Having the big boss involved prevents the boss and subordinate from gaming the system or pursuing their own interests at the expense of company goals.

Systemic problem-solving. The big boss can identify and address organizational issues that hinder performance across multiple teams.

Career development focus. Big bosses should track the progress of employees two levels down to ensure a strong talent pipeline for the organization's future.

10. Implementing previews requires a major mindset shift but is worth it

I know this all sounds foreign and scary. It should be scary: I'm asking you to go from a war zone into a place where you're supposed to be a partner with your former enemy.

Overcoming ingrained habits. Managers accustomed to the power dynamics of reviews will need to learn new ways of relating to subordinates as partners.

Building trust takes time. The benefits of open communication won't be immediate. Both bosses and subordinates need to prove their trustworthiness through consistent behavior.

Customized implementation. There's no one-size-fits-all approach to previews. Each organization and team needs to develop a format that works for their specific context and culture.

• Start with pilot programs
• Provide training and coaching
• Celebrate early successes
• Be patient as new habits form

With commitment and persistence, previews can transform organizational culture and dramatically improve both employee satisfaction and business results.

Last updated: September 27, 2024