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The performance review conundrum

Victor Aspengren is a vice president at Prairie Capital Advisors Inc.

When companies are asked "What is your greatest asset?", 95% of the time the answer is "our people". If people are the greatest asset and a company wants to maximize its assets, does it not make sense that a return on invest (ROI) is calculated?

Companies measure their performance with monthly financial reports and they slice and dice the numbers of the company in a hundred ways to analyze their ROI. 

The comedy of people being the greatest asset in a company is that the majority of companies only measure their people once a year through a performance review process. To add to the comedy, most companies and their employees would grade their performance review process with a "F".

The following is a short list of typical performance review issues:

  • Rating scales
  • Performance review is concurrent with wage increases
  • Supervisors' (reviewers) lack of preparation
  • No dialog
  • It happens once a year
  • Lack of goals
  • The CEO does not get reviewed
  • The Board of Directors does not get reviewed

The list goes on and on...

Companies should consider making a significant investment in their performance review process.  It could be one of the best first steps to maximize the greatest asset in a company - "the people".

 -Victor Aspengren

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