Are There Disadvantages to Performance Evaluations?

Dear Pros and Cons:

There are many disadvantages to continuing to do poorly conceived or executed performance reviews. I’ve seen many poorly done reviews entered into evidence against companies in unemployment, EEOC and other cases. Doing evaluations takes time away from pressing business concerns. Managers and employees often feel awkward when doing and receiving them. Poorly done, they can cause perceptions of unfairness. The list goes on.

Many companies are just going through the motions and little value is added by the process. Managers have competing priorities and don’t see performance evaluations changing anything except the time they have available to work on, what they perceive to be, more important business needs.

Some companies believe that performance appraisals lead employees to expect regular pay raises, which they can’t afford or don’t wish to provide. The thought that failing to do performance reviews will reduce an employee’s desire for regular salary increase is naïve. If you want employees to feel both underpaid and under-recognized, stop doing good, regularly-scheduled performance reviews.

If you do performance appraisals and employee performance doesn’t change, there is little point in spending any more time on the process than is required. I am often asked to provide performance appraisal forms that are “quick and easy to fill out.” Getting forms done quickly is seen as more important than getting evaluations done well. When you start with a lack of understanding of the value of a good evaluation, lack commitment to do them properly and have a poor process to support the generation of a good evaluation, you have little chance of a good end result. 

I spend much of my time demonstrating the benefits of doing good evaluations and designing efficient processes to support them. A few years ago, I did a study of terminations that occurred in organizations whose performance evaluation processes weren’t optimal. Out of those employees terminated for performance reasons during the period reviewed, over 90 percent had received fully satisfactory or better ratings on their most recent — sometimes within weeks of their termination — performance review.

I agree that improperly documented and presented evaluations are worse than none at all. No, or poorly done, performance evaluations are one of the major causes of avoidable performance-based terminations, less than optimal performance and a raft of other deleterious issues for businesses today. It is very difficult for an employee to get better if he or she doesn’t have a clear idea of what to work on. 

I don’t, however, see any of the above as viable excuses for failing to do good performance reviews; it is just a convenient truth to camouflage a lack of management vigor and discipline. 

Good performance reviews offer outstanding value. Fact-based performance reviews, properly documented and presented, improve communication and alignment between employee and supervisor, help improve personnel and organizational performance, assist in the intelligent allocation of scarce financial, training and other resources, reduce legal exposure and build organizational trust. Put together a good performance management process, train managers and employees on it, do the work required and reap these benefits for your employees and organization.

SOURCE: Rick Galbreath, SPHR, Performance Growth Partners Inc., Bloomington, Illinois, Sept. 6, 2015.