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Performance Reviews: Why Bother?

The worthless corporate ritual that is the annual performance review
Performance Reviews: Why Bother?
Illustration by R. Kikuo Johnson

When Peter Gross, an editor in the financial services industry in Virginia, walked into his 2008 yearend performance review, he was feeling pretty good. “I knew I’d get dinged on some nebulous things like ‘initiative’ and ‘enthusiasm,’ ” he says. “But on the measurable stuff, I’d exceeded all my goals.” So he was taken aback when, on a scale from one to five, his manager gave him mostly twos and threes. “I remember there was one thing I was supposed to do 30 times over the course of year, and I’d done it 49 times, but I still only got ‘meets expectations,’ ” he recalls. Every year after that, Gross worried for weeks leading up to his annual review. “I was a mess,” he says. “I’d be up stress-eating until 2:30 in the morning, and of course the actual day was nerve-racking.”

Performance reviews can be traced to the 1930s, when a Harvard Business School professor named Elton Mayo studied the behavior of workers in a Western Electric factory. He found that happiness and productivity were directly related to the social structure of the workplace. Suddenly it wasn’t enough to just hire someone to do a job; bosses had to manage and mentor people, too. They did that, usually, with formal meetings. In 1950 the U.S. government institutionalized this with the Performance Rating Act, which mandated annual reviews of federal employees. Later laws would tie bonuses and salaries to these assessments.