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Blog: Management

Performance Reviews—They’re Pointless

Performance Reviews—They’re Pointless

Image Source/Corbis

If your firm isn’t giving out raises, you’ve got a great excuse to forgo the whole appraisal exercise. Do we really need to tell employees where they excelled and where they fell down over the past year—and does it help them when we do?

Some chief executive officers cling to the performance-review protocol notwithstanding its time-sucking properties, because they believe it keeps people focused on their goals. These CEOs may not realize that their middle managers are just as excited about the round of one-on-one review meetings as they are about defending their budgets in front of the executive team. Among corporate processes, performance reviews are famous for their design flaws, bureaucratic regulations, and general air of pointlessness. So why are we still doing them?

Here are my top three reasons for making mandatory performance reviews extinct in 2012:

• Managers and employers waste hours filling out forms and comparing notes in awkward sit-down meetings, only to get up and do the very same things they were planning to do anyway. There’s no evidence that performance reviews improve productivity. If a big, hairy, expensive process doesn’t pay for itself, why keep it in place?

• The company’s lawyers want performance reviews to back up whatever performance-improvement or disciplinary moves a manager may have up his sleeve. HR wants the performance review to justify the employee’s salary increase. Someone else wants the performance review to pinpoint the employee’s training needs, and so on. We can unbundle these competing priorities and design new processes that don’t suck up so much time and energy.

• Performance reviews reinforce the twisted view that a manager’s job is to sit in judgment on his employees. Your employees know how to do their jobs, and if they don’t, why are you waiting to tell them? Performance reviews make formal and stilted what should be an organic, continual conversation about the work, team dynamics, and near-term and long-term priorities.

If wholesale abolition of the review system is too radical, here’s a less dramatic solution. Let your employees review themselves. Instruct the manager to read each employee’s one-page self-review and add a few comments. Make the face-to-face review meeting optional, at the employee’s request. Tell the staff members what you’re planning to pay them for the upcoming year and establish a new process for goal-setting in a group. The 2 percent of employees who long for your guidance know where to find you. The 98 percent who never wanted it will rejoice.

Liz Ryan is an expert on the new-millennium workplace and a former Fortune 500 HR executive.

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