In yet another irony of organizational behavior, as the use of job performance reviews increases, so does the research that questions their effectiveness.
I’ve always been something of a skeptic. That is to say, I’ve seen well-designed processes implemented by wise and sensitive supervisors build better, stronger, more trusting relationships that resulted in continuous performance improvement.
The problem is I haven’t seen very many of them.
Most of the forms and processes I’ve seen can’t even pass a basic snicker test. They’re artificial and superficial at the same time. They inspire more fear and resentment than anything else. They undermine trust and throw huge wedges into the gears of cooperation.
No wonder then, as Wharton management professor Peter Cappelli notes, “there’s also almost no practice in the world of business that people hate more.”
And yet, the formal performance evaluation is ubiquitous. First, it became commonplace in U.S. businesses, beginning with larger ones and moving to smaller ones. Now it’s become commonplace overseas too – often for no better reason than it’s an accepted business practice in the U.S.
At the same time, many nonprofit organizations have adapted the practice -- often simply because it’s so widely used in the business world that it’s assumed it must be an effective tool of improved individual and organizational performance. Thus, Cappelli says, “The federal government mandates it for employees. State governments do it. The Army does it. The Navy does it.”
Today an estimated 90 percent of the workforce has at least an annual performance review despite the fact that there is little research to show that the practice is actually helpful to employees, their supervisors or the organizations that employ them.
Cappelli says his research indicates that “the best predictors (of employee ratings on performance reviews) seem to be things which have more to do with bias than with good management practice.” Basically, the more things the reviewer and the reviewee have in common and the more they like each other, the better the reviewee’s scores will be.
All this is not to say that performance reviews should be universally scrapped.
When done well using top-notch tools, they can contribute to performance across the board. So if they are going to be used, a lot of study and thought should go into what kinds of tools and processes should be used -- and reviewers should be given sufficient training in how to properly conduct the reviews so they contribute to better performance rather than undermine it.
However, lacking these ingredients, my bias is to scrap them.
And remember, no matter how good your tool or how well you use it, an employee evaluation is not by itself the holy grail of excellence.
Listen to the complete interview with Cappelli or read an edited transcript here.