What Happens when Companies Remove Performance Reviews?


I hope, by this point in business evolution, we all realize the standard employee evaluation is a total joke. It’s a farce. It allows lazy, bad managers to hide behind some once-a-year BS. They throw themselves on the cross the entire time — “This so much process! I’m so busy with everything else I do all day!” — and then give a generic review. The review is predominantly a compliment sandwich where the negatives are from seven months prior. The employee had no idea about those negatives at the time, but in the employee evaluation, the grenades come out.

At the end of the mostly-stressful 30 minutes, the employee gets a tiny little raise (“Wish we could do more, Bob! Next year!”) and the manager goes back to digital paper-pushing and crippling the economy. The next time you’ll hear from your boss after the employee evaluation is in two weeks when some no-context email flies into your inbox. It’s a sense of urgency project, though.

Now, what I described above is a little drastic. That is true. My broader point is that the employee evaluation is a classic managerial move. It allows managers to hide behind “this is the only time of year where this conversation is acceptable,” which pretty much murders the idea of organic feedback. Think about it this way. You can grab your phone right now and order a car in what, 3 minutes? But you need to wait another seven months to figure out how things are going at work? That seems questionable.

As a result, some bigger-name companies are ending the idea of standard employee evaluation. GE was a big name that did it, and others are following suit. Maybe the performance review shall die! Goodbye employee evaluation!

The problem: what happens next? Organic feedback?!?!? LOL. What actually happens once you eliminate the employee evaluation is a bigger farce than the evaluation itself.

What happens after the employee evaluation goes away

From a new article on Wharton:

At firms where reviews had been eliminated, measures of employee engagement and performance dropped by 10%, according to CEB’s survey of nearly 10,000 employees in 18 countries. Managers actually spent less time on conversations, and the quality of those conversations declined. Without a scoring system to motivate and give structure, performance management withered. As one manager told CEB: “When I gave someone a low score in the past, I felt responsible for helping them out, now I just don’t feel that I have to spend time doing that anymore.”

So basically, here’s what is happening. We eliminate the employee evaluation because it’s bad, slow, process-heavy, and not in line with current business needs. We replace it with … nothing?

Why are we replacing the employee evaluation with nothing?

Let me give this to you as straight as I can. Ready? Brace for impact.

Most bosses don’t want to be bosses. They don’t want direct reports. They just did it because it was the only way to make more money at that company.

I’m sometimes an asshole, but in general I’m fairly personable. I can crack jokes. My wit is quick. I’ll talk about a host of topics. Literally every boss I’ve had would rather plunge into a vat of acid than have a 30-minute business conversation with me. OK, so maybe I’m a bigger asshole than I thought. But this has happened to my colleagues too. When I was younger, it used to depress the hell out of me. But now I’ve seen research that people really don’t want to collaborate at work, and managers sure as hell don’t want to have real conversations with direct reports.

The Protestant work ethic is all about “Put your head down, hit your f’n targets, don’t ask for anything more.” That might shift a little bit with Slack and Trello and open offices and millennials, but … as long as there’s hierarchy, it won’t shift too much.

So this is where we come to. We get rid of the employee evaluation because it makes no sense in a 2016 business world. And … we replace it with nada. We allow managers to rush around screeching about how busy they are, even though the company itself has no clearly-defined priorities aside from “make money.” There’s no time for conversations! I’ve got a stand-up on revenue plays in 15! Gotta prepare for it! Or, ahem, surf the Internet.

How do we make the employee evaluation better?

The easiest idea is “tie effective communication to managerial bonuses,” but since effective communication is hard to track … that might not be so easy.

Here’s what I’d do:

  • Schedule a 30-minute meeting every two weeks with each direct report you have (within reason; spread them out over a month if it’s a ton of people)
  • Spend the 30 minutes like this: 5 on small talk, 10 on current projects, 10 on future iterations, 5 on close/small talk some more
  • Record some salient points from the meeting and come up with 1–2 action items
  • Use the conversations to move issues forward and get to know each other a little bit better
  • Rinse and repeat

Then, every quarter, do a more formal 1-hour meeting where you go through stuff from that quarter. That’s the employee evaluation. But if you’ve been having the two-weeks meetings, nothing in the quarterly meeting should be a surprise. Basically, avoid canceling meetings in an effort to show how important you are in another sphere and then the employee evaluation process starts to make a lot more sense.

What do most companies do about the employee evaluation, though?

Well, per the quote above, they simply ignore it. Other ideas:

  • Throw technology at it without context
  • Use it solely as a means to force out people that managers don’t like
  • Give predominantly good reviews and no bonuses except to executives
  • Allow everyone to hide behind it just as we do with e-mail
  • Scream “My people should know where they stand! We’ve got real work to do!”
  • Laugh and say “That’s some HR thing! I slay revenue dragons!’

The employee evaluation is meaningless, but replacing it with nothing is meaningless too.

What else you got on the employee evaluation process?

My name’s Ted Bauer, and, er, hit me up.


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