Tuesday, April 20, 2010

The Elimination of Performance Reviews

I've seen at least a dozen different employee performance evaluation systems in my career--all well-intended-- but they generally do more harm than good. Many companies are eliminating them altogether. At least one company decided recently to change them to "Employee Appreciation Reviews"-- only positive comments allowed.

My logic for their upheaval is, if you see yourself as a great leader and manager, then you will only have great employees on your teams. If you have something less than great employees, then that means that you are retaining people that you shouldn't-- and therefore, you are not a good leader nor manager and you shouldn't be in the job.

Therefore, if you have only great employees on your teams, then the performance review process is simply a formal way of telling people how much you appreciate them and building their self-esteem. It also provides them with a document that they can carry with them for reference if and when they decide to take their career elsewhere. Ninety-five percent of the world will rise to the level you treat them and believe in them. Using the performance review process to grade human beings as if they were beef cattle or chicken eggs is demeaning and incredibly old-school. You should either eliminate them altogether or use them to build self-esteem. If you need to give the boot to an under-performing employee, there are other better ways of handling and documenting that process-- letters of warning, etc.

This article, below, from the Wall Street Journal, summarizes a very good book on the topic and one that I endorse 100%.

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