I didn’t come up with this concept. But after reading an article in the WSJ by Samuel A. Culbert, I think he makes a good point. I’d be interested in hearing what you think about his arguments.

Culbert asserts that performance reviews “destroys morale, kills teamwork and hurts the bottom line.” He goes on to outline seven points explaining why performance reviews aren’t the answer. Although the goal of performance reviews is to give employees feedback on how they’re doing and look at how they can improve, I find that many people I talk to (colleagues and friends from school) all find performance review time a bit nerve-racking. But why is that? I know performance reviews aren’t meant to make employees uncomfortable, affecting morale and communications. 360-degree feedback has since been introduced but Culbert also has a few criticisms regarding this method. I know that it’s important to give feedback to employees, but maybe the format needs to be improved…
(Please keep in mind these are my interpretations of his seven points. I strongly suggest you read the full article to get your own sense of his arguments.)

1. Two parties with misaligned goals. When walking into a performance review the boss’ goal of discussing areas of improvement don’t match up with the employee’s goal of promotion and compensation.
2. The false belief that performance affects pay. Culbert argues that pay is primarily determined by market forces (which makes sense – just look at our current economic situation – are many people expecting big raises/bonuses this year?) and most jobs are placed in a pay range even before the employee is hired.
3. As objective as we try to be – there are always personal biases. This is a fundamental conflict. Depending on one’s position, their opinion and view will differ. This is where Culbert also brings up the “360-degree feedback”. When feedback is anonymized that creates more opportunity for various parties to further their personal agenda since there is no accountability associated with their review.
4. Everyone is different – “once size does not fit all”. Performance reviews often revolve around a predetermined checklist. This is why people may focus more on pleasing their boss than doing a good job. Since a happy boss will (theoretically) leave you with a higher score.
5. Employees are reluctant to go to their bosses for help (for fear that it will reflect badly on their performance review). It makes sense that employees would go to their bosses for help, guidance and improvement. But, “thanks to the performance review, the boss is often the last person an employee would turn to”.
6. Disrupts teamwork. The most important type of teamwork is the one-on-one relationship between a boss and their subordinates. But in performance reviews, as opposed to taking the stance “how will we work together as a team”, it’s “how are you performing for me”.
7. At the end of the day… performance reviews don’t improve corporate performance.

After proposing all of these flaws, there must be an alternative. The one that Culber offers up isn’t that bad. As opposed to doing performance reviews, managers should start doing performance previews. This way the focus is not on the past, and things that cannot be changed. Instead the manager and employee can work together to figure out what needs to be done in the future and how goals may be met. This performance preview wouldn’t be done yearly, it would be done whenever either the boss or the employee has a feeling things aren’t working well. Past performance may be used for illustrative purposes and this is an ideal way to evaluate your boss as well and get a two-way conversation going. It then becomes the boss’s responsibility to develop the employee based on their individual strengths and weaknesses.

I guess performance review isn’t something that people talk about too openly, but do other people feel funny (if not nervous) about performance reviews? Is Culbert’s solution a viable one?