Why Performance Reviews are a “Bumpy Road” to Employee Engagement

August 21, 2011 § Leave a comment

Performance reviews are still the tool of choice to manage talent in organizations.  Studies show that 90% or more organizations still use them.
They still don’t accomplish their intended purposes and they never will.  My mother told me to “never use never.’”  In this case she was wrong.

Any performance review or 360 instruments will only measure the impact of a dysfunctional (or functional) system on an individual and how
others interpret his/her reaction to that dysfunction.  It’s like having an engine, transmission, and axel giving their opinions about how well the tires are behaving while the driver steers the car onto a back country unpaved and bumpy road.  Someone ought to speak with the driver.

I am too cynical about performance management.  Sorry!  I just don’t see how it can work because it assumes the person being rated can control all circumstances and factors that impact his/her performance.  Furthermore, the systems are too complex to allow the raters to have the kind of information they need to do a proper rating job.   The current performance review is inconsistent with systems thinking which requires synthesis. A performance review or a 360 instrument will do nothing to help the driver steer off the bumpy road in order to help the tires.

I conducted training recently in Texas.  I flew in evening before (4 hours).  The plane was 2 hours late. I arrived at the hotel at 11:30 PM local time and had to set up at 7:30 AM.  I had a reservation the following day (Friday) on the last fight back to NY.  The training was scheduled for 8:30 PM to 5 PM.  Two days before the training I confirmed the start time of 8:30 AM.  I was cutting it close because I was 30 minutes away from the airport and I expected traffic problems on a Friday night.

At 8:30 only 1 of 10 participants was in the room.  I found out the training coordinator had mistakenly told the participants the start time was 9:00 AM not 8:30 AM.  We started 30 minutes late.  I had to compress.  Time was critical. I had to conduct the class past 5 PM in order to finish.  There was traffic. I was cutting it close.  I had to return a rental car. Furthermore, renters must refill the gas tank prior to returning the car or get penalized at least $50.   Since I was running late and I needed to catch my flight (last one for the day) I skipped the refilling.   They charged the $50 penalty.  The client complained. What should I have done?   If I missed the flight I would have to stay overnight at the company expense.

Although the circumstances (the system) created an environment that impacted my performance in the training (and my emotions) I stayed
calm.  I was respectful.  I made a decision that was (in my mind, saving money for the client) best for both me and the client.  They still complained and gave me a poor evaluation. Any performance review can only measure the impact a system has on the individual.  My example is rather simplistic.  Imagine evaluating a Senior Leader with hundreds of employees, with economic issues, competitive pressures, and multiple complex projects under his/her influence.

How can any performance review possibly evaluate the performance of this person?  It can’t.  It can only judge (with a grade) the emotional reaction (emotional intelligence) of the person in the face of challenging circumstances and rising pressures to perform.  If that is all the performance review can do then let’s say so. Let’s change its purposes.  Does the current review process (or 360) really help improve employee engagement?  I think it creates an even bumpier road.

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