Managing Employees

Rethinking Employee Performance Reviews

Many employers hate to conduct performance evaluations, and many employees hate to receive them. That’s because performance evaluations are often ineffective and pointless, and the employees end up feeling confused, frustrated, and demotivated, says Samuel A. Culbert. The award-winning author, who is also a professor at UCLA’s Anderson School of Management, also advocates doing away with performance appraisals altogether.

Whether or not you subscribe to Culbert’s radical approach, experts seem to agree that the performance evaluation system is definitely in need of a major overhaul. In their book, Management Reset, Edward E. Lawler III and Christopher G. Worley argue that companies must change the performance management system for it to be an effective and valuable tool.

For example, one key mistake that companies make is to grade performance based on such personality traits as being “reliable” or “trustworthy.” Instead, they say, employees should be evaluated and rewarded on how well they do their jobs, as well as their accomplishments.

Lawler and Worley and Business Management Daily offer the following tips for improving the performance evaluation process:

1. Don’t rely on memory to recall an employee’s performance. Using some sort of simple log to document job performance on a regular basis allows managers to present a data-driven snapshot during evaluations.

2. Be methodical and systematic. Consider using the following framework:

  • Describe the problem.
  • Reinforce performance standards.
  • Develop a plan for improvement.
  • Offer your help.
  • Alternate negative and positive comments.
  • Emphasize potential.

3. Avoid making generalizations. “Lately, your work has been sloppy” is too vague, whereas “Your last three reports contained an high number of statistical errors” is specific. “You’re certainly not an English major” focuses on the person vs. his performance, whereas “I know you’re capable of producing higher-quality work” suggests that you have confidence in the employee’s abilities. “Don’t let it happen again” sounds like a threat, whereas “How can we produce error-free reports?” engages the employee by asking for feedback on how to improve performance.

4. Avoid terminology that could get you into trouble. Stick to evaluating performance rather than using subjective words like “attitude” or “demeanor,” which could be viewed as discrimination based on age, gender, race, or disability.

5. Don’t inflate evaluations. If you consistently rate a mediocre employee as “competent” and then have to fire her for poor performance, your appraisals won’t support the dismissal. This could open the door to a legal complaint.

6. Use 360-degree appraisals for development, but not for rewards. Although it can be helpful to have peers, subordinates, and customers provide input, this information usually doesn’t produce valid data for assessing an employee’s performance. For example, if peers are aware that their input will affect pay increases and promotions, they may be subjective (overly positive or negative) and not objective.

7. Send the performance evaluation in advance. According to Lawler and Worley, research shows that people are nervous and apprehensive before and during performance evaluations, and they often don’t actually hear or accurately process what’s being said. However, if you send the appraisal before you meet with the employee, he or she has time to recover from the initial shock of the evaluation, to come up with questions to ask you, and to correct any mistakes in the appraisal.

8. Allow employees to provide self-assessments. Let people have a say in how well they think they’ve performed. This leads to a more well-rounded evaluation and creates a sense of fairness.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.