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Get Rid of Performance Reviews? Not So Fast!

Improving employee performance is the goal of almost every employer. In pursuit of this19152867 goal, the mainstream approach is to use an annual performance and pay review. But a UCLA Professor, Samuel Culbert, says that employers should get rid of the performance review!

In the WSJ Culbert wrote,

"To my way of thinking, a one-side-accountable, boss-administered review is little more than a dysfunctional pretense. It's a negative to corporate performance, an obstacle to straight-talk relationships, and a prime cause of low morale at work. Even the mere knowledge that such an event will take place damages daily communications and teamwork."

I understand Culbert's point. No one enjoys the performance review process, whether you are the boss or the employee. It's also true that many supervisors do a very poor job of conducting performance reviews. Fellow IowaBiz author Victor Aspengren has said that most companies use subjective rating systems in their performance reviews, which leaves everyone in the company, supervisors and employees alike, dreading the annual review process.

What happens next is what I call the Lake Wobegon effect: Every employee becomes "above average" because supervisors are unwilling to hold employees accountable. Then, when it comes time to discipline or terminate employees, companies are often shocked when I tell them it may be difficult to discipline or terminate an employee because of their employee evaluations.

But it's not that easy to dismiss performance reviews. Employee evaluations are valuable proof in an employment lawsuit. Poor performance must be properly documented. Otherwise, the judge or jury will not believe you when you say the employee performed poorly. You should conduct the evaluations on a regular basis, usually at least once per year. And Victor's ideas on creating a dialogue with your employees is on the mark as long as that dialogue is open, honest and holds employees accountable for their performance.

Hat tip to Daniel Schwartz of the Connecticut Employment Law Blog who wrote a nice post about the professor's article.


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Agree on the Lake Wobegan effect. Thanks for the h/t

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