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Business organizations can learn from educational organizations. Health care organizations can learn from – and teach – both of them. Government departments can learn from business, and large and small businesses can learn from government agencies – and from each other.

For special example of how one kind of organization can learn from another kind is found in an axiom I encountered often when teaching undergrad and MBA classes: “The best way to get a large organization to perform better is to get it to perform like a bunch of small organizations.”

Certainly, both not-for-profits and for-profits have a lot in common and can learn a lot from each other. Nonetheless, they are different beasts, so lessons can’t just be lifted from one place and uncritically applied in another. Beyond a very few basics, they have to be carefully filtered from one place to the next – and that’s true even when the organizations are alike in almost every respect.

Over the past couple of decades one practice I’ve seen dioceses and parishes uncritically adopt from the business world is the annual performance review. That’s unfortunate for two reasons. First, most review processes are seriously flawed. And second, if the reviewer is not highly skilled in the art, the experience is more likely to do harm than good.

The irony in church organizations uncritically adopting the annual performance review is that it’s not uncritically accepted in the business world. There are many wise and articulate people in that realm who point out common problems with the process and the people who generally administer it. One of these people is Ken Goldstein, a man with impressive credentials in the business world.

He has served as chairman and CEO of SHOP.COM, executive vice president and managing director of Disney Online, and vice president/executive publisher of entertainment and education for Broderbund Software. He’s on the boards of Thrift Books LLC and Good Men Media Inc., and currently advises startups and established companies on brands, creative talent, e-commerce, and digital media strategy.

In a brief article he offers three reasons why leaders in every organization of every kind should be wary of annual performance reviews. Given his track record, his advice is worth a few minutes of every leader’s time.

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