Performance appraisals for strategic management. It's amazing that such dinosaurs (performance reviews, not the people) are still around. Yet despite the outcry against performance reviews, there's nothing wrong with them that can't be fixed by getting managers off of center stage. Top management can fix the basic problems the performance appraisal system faces.
Critics argue that performance reviews not only don't accomplish what they're supposed to do - that is, improve performance, enhance employee skills, and achieve planned outcomes - they have unintended negative consequences. In many cases, unfortunately, that's true. But it doesn't have to be that way. What companies need to abolish is not the performance review itself, but the idea that it's a "management tool." Here are some practiced paradigms that must be discarded:
Performance Review is designed, as the name suggests, in support of managers. If you believe this, your management is one of the roadblocks to exceptional performance. The most useful performance review supports work relationships between employees (managers too are employees). Both parties need to address the question of how to best serve the goals and outcomes and align their work efforts.
Performance review is a management tool. Managers are not necessarily the best qualified to assess their staff's accomplishments. In fact, they may have a very limited or biased view. A more complete and accurate picture results when employees and managers seek feedback from a variety of customers, team leaders, professional peers, and others inside or from outside the unit.
Performance reviews include judgments from a "higher authority." Judgments produce compliant workers – people who are told what to do – not innovative ones. People hate performance reviews because most of them are fault-finding. How much better to ask, "What did we learn from this? What can we each do differently the next time?"
The manager is responsible for obtaining input from the employees. 21st-century employees can't assume a passive role in performance review, providing "tough-minded" self-assessments and valuable insights only on request. They must take the initiative, soliciting feedback from their managers and others. No risk-taking to solicit the complete picture and no learning means no improvements.
Managers should be trained in performance reviews, then prepare their employees for the process. If the performance review is to be a productive partnership with employees taking the active role and both parties committed to exchanging knowledge and ideas, managers and employees need to be trained together.