Performance appraisals are widely criticized as a management technique. Critics say that they harm the relationship between the employee and their boss or the entire company and that they are ineffective as a measurement tool. While these facts may be true in some cases, there is considerable evidence that performance appraisals aren’t going anywhere and that no better alternative has been found yet.
Assessing the Use of Performance Appraisals
Sometime around 2002, Edward Lawler III, a Distinguished Professor of Business at the University of Southern California, investigated whether corporations used performance reviews and what they thought of them. He analyzed more than fifty organizations and found that every one of them had some type of performance management system. Some of these worked better than others, but only a few said they were considering doing away with them entirely.
In 2012, Professor Lawler again assessed the status of performance reviews in the workplace, this time using 100 top corporations. Again, all of these companies stated that they used performance management systems and only six percent of them said they were considering ending their use. On average, 93 percent of the employees of each company received performance reviews and they received them at least once a year.
One interesting fact is that companies rated their performance management systems about equally satisfactory ten years ago as they did today. Apparently, there was neither a great alternative to performance reviews nor a way to improve the process significantly discovered in the last decade. The lack of decline in the use of performance reviews points towards a long future for these assessments as tools as well.
The Argument Against Performance Reviews
Doctor Samuel Culbert works for the School of Management at the University of California, Los Angeles. He believes that performance reviews are more harmful than helpful and that alternatives do exist. Dr. Culbert believes that the number one reason that bosses and subordinates do not work well together is because performance reviews undermine their working relationship and destroy trust.
Although performance reviews are widely used, Dr. Culbert believes that they are far too subjective to actually be of any use. Different bosses often rate the same person’s efforts on completely opposite ends of the scale, for example. He also points out that pay grades and raises are usually determined by the economy and performance reviews are only a fiction that is used to justify certain employees receiving or being denied a raise.
If performance reviews aren’t the answer, then what is? Dr. Culbert cites the use of something he calls a “performance preview.” This involves boss and subordinate communicating more openly and attempting to work as a team rather than one evaluating the other. In some workplaces these frank talks are already occurring but almost nowhere have they replaced performance reviews.
The Bottom Line
Professor Lawler does not dispute that some performance management systems are better than others. However, he believes that there is no effective alternative to their presence. Dr. Culbert believes that performance reviews are harmful and that an alternative does exist. However, his viewpoint is clearly the one fighting an uphill battle.