As a veteran manager, I have long since gulped the Kool-Aid and accepted the proposition that if you want a leadership role, you must be willing to handle all sorts of stuff you would rather not deal with.

And there is one management task that I hate over all others, one that I never seem to be able to avoid or get away from no matter how hard I try. In fact, I’m involved in it right now, and just like as in past years, I’ll struggle to get through it and wonder, “Is there really any great benefit to this?”

Yes, the annual performance review drives me crazy.

It’s not that I don’t see the value in evaluating workers. I do. It is terribly important to give the people who work for you regular, actionable feedback on what they are doing and how they might better help the organization.

I get all of that, but what I hate isn’t the actual discussion with the employee, but rather the process you must go through to get to that stage—the inflexible forms, the manual process and the lack of a good follow-up system that makes the evaluation truly meaningful. Yes, there are great automated talent systems out there that make this a lot easier and more meaningful process (I’ve seen sharp-looking software from such companies as Taleo and Authoria), but these systems still have not gained mainstream acceptance, at least not in the places that I have worked at.

As a manager, I’ve come to accept the fact that you can’t blow off performance reviews no matter how manual or difficult the process can be. It’s just something you have to grit your teeth and do. After all, in many organizations, the evaluation process is a central element in giving out raises, right?

Well, it’s not if you work in the city of Denver. According to a story this week in The Denver Post, “Nearly one in five city of Denver employees didn’t receive a timely performance evaluation in 2008 but got pay raises anyway.”

According to the newspaper, the city’s compensation system “mandates that employees who do not get an evaluation from their supervisor be marked as ‘successful’ and given a merit pay raise. But a complicated evaluation process, and an admitted lack of attention to a lingering issue, led to pay increases for about 1,500 of about 8,600 eligible without a formal evaluation.”

This isn’t a new problem for Colorado’s largest city. Denver Councilman Chris Nevitt said during a City Council committee meeting that some employees have told him they haven’t received an evaluation for three years. “We don’t know if those people stunk or if they’re doing a great job,” he said.

Denver “hopes to automate the evaluation system by 2010 and to streamline the evaluations,” according to the executive director of the city’s Career Service Authority. And for good reason. The lack of a system is costing the city a lot of money in raises that are going to employees who don’t deserve it.

Of those Denver city workers who did receive timely evaluations last year, 54 received a rating of “needs improvement,” 3,954 received a “successful” rating and 3,140 received an “exceptional” rating, according to the newspaper. In other words, if you apply those percentages to the 1,500 city workers who didn’t get a review, more than 800 public workers got a raise despite the fact that their performance probably needed improvement.

If the Denver experience isn’t a perfect example of why every single organization needs strong performance reviews, I don’t know what is. It should be a wake-up call for managers who slack off on employee evaluations and a perfect sales pitch for all those HR software vendors who have technology that would make the process easier.

But given the economy, I just don’t see a lot of companies making big investments in systems like this right now, no matter how valuable they might be. That’s a pity, because I know there are a lot of managers out there like me. We’re spending way too much time on an antiquated process that offers too little regular feedback to help workers improve and, ultimately, do a better job.

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