Are Performance Reviews Worth It?

Skeptical views on the value of a formal, scheduled review of employee performance. March 13, 2014

Question (WOODWEB Member) :
How often should one have performance appraisals in an organization? Does the employee need to be shown his/her scores and should it be discussed openly?

Forum Responses
(Business and Management Forum)
From Contributor W:
We do one review per year. If your supervisors/managers are communicating openly with their employees, the employees should already be aware of how their performance is. That makes the annual performance review only necessary for documentation purposes.

From contributor A:
I came from a corporate environment, and believed for years that regular scheduled performance reviews were the only way. At the same time, I noticed that people were expecting raises because times were good, everyone else received raises at review time, etc. - no longer. If there is a performance problem, I need to let them know now. When they are doing well, a few kind words and a smile go a long way. I take a look at our pay scale (my pay graph) every few weeks or if I have a question in my mind to answer.

If someone needs a raise, I have a short sweet conversation thanking them for their hard work. I also explain I would like to pay them more (very true for most), but two things. One - our relatively low pay is job security, and two I need to make some money off them. This kind of honesty has always been received unusually well.

Typically, if you appraise their performance, you need to show them their numbers, and explain why they got any low numbers. Otherwise, what is the point of a performance review? But for the record, our company performance has only benefited by not having formal performance reviews. We’ve had roughly five years without reviews, then five years with reviews, and the last five without.

From contributor K:

I advocate official performance reviews happening never. They are actually counterproductive. They are a source of angst for both the manager and the employee, they tend to belittle the employee, and like mentioned above, they are a poor substitute for ongoing real-time feedback and discussion. Google it and see, there is plenty of good science to back up the notion of abolishing performance reviews. From a management standpoint, it's good to have scheduled times throughout the year where you review compensation, but this shouldn't include the employee.

From contributor C:
There is nothing about an official performance review that precludes ongoing real-time feedback and discussion. There is also a similar amount of good science available to support the benefits of performance review. Don't be so negative - think positive. Be the employee you would want to hire and you will make more money.

From contributor K:
Virtually all performance review strategies are belittling and reinforce the notion that the employee is subservient to the manager. 360 reviews and other types try to get around this, but they do so at the expense of large amounts of non-value-added activity by many people. That's the crux of it for me, if you want to get a really objective and systematic review of performance you need lots of people to provide input and that gets to be a serious expenditure of time.

I've given well over 300 performance reviews in my career, in the most thorough, humane, non-threatening manner I could. The results of the reviews were undetectable by me, and believe me I looked for it. What’s better than sit-down reviews is having the manager schedule once a month or so to take two minutes to drop by an employee's station and tell him first what he could work on, if anything, and then what she likes about his work recently. If there's a pay increase, let him know it will be showing up on his next check. Guaranteed that will be more effective at coaching employees and garnering goodwill.

From Contributor U:
I used to be a real fan of scored performance reviews on a regularly scheduled basis. I am huge into numbers - if you can measure it, you can make it better has always been my opinion, and I still believe that. Unfortunately I found the metrics were too subjective to be of much value - the numbers are almost arbitrarily assigned by someone who already has a personal opinion of the person being reviewed.

The real eye-opener was when I started tracking individual productivity and profitability levels, rather than assessing the team as a whole with one global set of numbers. We had a very personable and popular guy who always scored high on his reviews - who very rarely met his share of the production quota and was getting paid more than anyone else. We had another who was unpopular, and to be quite honest really can be an annoying little twit. He scored poorly on reviews and was the lowest paid employee in the company. He consistently exceeded his quotas.

Our review process now is more of a feedback session that is composed of three questions What more can the company do to help you, what more can you do to help the company, and where do you want your career here to take you. All other evaluations are an ongoing process of progressive management.