Should businesses just get rid of performance reviews?

Is it better to upgrade or ditch the performance review?

Performance reviews have been under fire. Should we be ditching, maintaining or upgrading them?

For managers, performance reviews can be time-consuming and unproductive; for employees, they are often stressful and irrelevant.

Three experts in this field share their thoughts on making the appraisal process truly meaningful and effective.

Dr Tim Baker

Organisational performance specialist

The performance review is an artifact from the last century. No research I’ve stumbled across proves that it increases performance. And people dread the thought of the review ritual. Yet we persist. Why?
The performance review is an artifact from the last century.

My own research reveals eight problems with the performance review. After talking to 1400 HR managers across 21 industries, this is what I heard:

  • The performance review is costly.
  • It can be destructive.
  • More often than not, the review is a monologue, not a dialogue.
  • The formality of the event stifles genuine discussion.
  • It occurs once in a blue moon.
  • It is widely perceived as a form-filling exercise.
  • It doesn’t get followed up – until next year.
  • People find the whole thing stressful.

Dr Tim BakerLet’s be honest: the review process is designed to control employees. Managers decide when they’re done, where they’re done, how they’re done and what the outcome will be.

So, what’s the answer? I say throw them out; they are well past their use-by date. The focus needs to shift from appraising to developing performance.

Performance-development conversations ought to happen moment by moment, day by day and incident by incident. These conversations are an ongoing process, not a once-a-year event.

Dr Dale Tweedie

Research fellow
International Governance and Performance (IGAP) Research Centre, Macquarie University

Performance reviews are invariably flawed, but the flaws are diabolically hard to fix or “ditch”.

One foundational issue is that much of our work is hidden. Consider the seemingly intractable work problem that you solve on Monday morning after a weekend of sleepless nights. What gets seen is the solution. The iceberg of effort and worry it took you to produce that solution remains hidden below the surface.

Dr Dale TweedieYet we can’t “ditch” the performance review, simply because we can’t help judging how others perform. Even without formal reviews, we still evaluate our colleagues’ performance. Some managers have been found to adjust the results of formal performance reviews to fit who they already think are the best (and worst) performers.

So the challenge is to judge performance as fairly and accurately as possible, while also recognising that our judgements about other people’s performance are invariably flawed.

It is worth scrutinising whether performance review systems add more than they cost. Formal reviews induce anxiety, partly because they make partial or biased judgements seem objective to others. Yet it is possible to have regular and open-ended discussions about performance without a formalised system.

“One foundational issue is that much of our work is hidden.” Dr Dale Tweedie 

For those looking to “upgrade” their performance reviews, one often overlooked starting point is to ask employees about which performance outcomes matter to them. Workers and organisations do not always have the same priorities, but there is sometimes more common ground than people realise.

And since performance measures are always fallible, having the right process is at least as important as having the right metrics.

Siobhan Gallacher

HR director
Accenture Australia

Siobhan Gallacher

Siobhan Gallacher

At Accenture, our goal is to be more fluid in our approach to assessing performance, to treat performance as an ongoing activity and also to reduce management time spent assessing past performance.

As a result, we have shifted our annual performance process to a new Performance Achievement approach that includes real-time, forward-looking conversations about setting priorities, growing strengths and creating rewarding career opportunities for our people.

Specifically, this new approach will enable employees to frequently discuss priorities with their supervisors and career counsellors and get ongoing feedback to help them progress their careers.

In terms of refreshing performance reviews, it is important for organisations to reflect upon what they are hoping to achieve through their performance cycle.

Will their people – their talent – grow and learn as a result of the evaluation? Will it motivate and engage the next generation of leaders?

“Performance-related activities need to be meaningful to the individual.” Siobhan Gallacher

Performance-related activities need to be relevant and meaningful to the individual, which is why Accenture has moved towards individualised ongoing management of talent, to support and position workers to perform better in the future.

About the experts

Dr Tim Baker

Dr Tim Baker was voted one of the 50 Most Talented Training and Development Leaders by the World HRD (Human Resource Development) Congress in 2013. In 2015, he was nominated for Thinkers50, which identifies the 50 most influential management thinkers in the world. He is author of six books, including The End of the Performance Review: a New Approach to Appraising Employee Performance and his latest, Conversations at Work.

Dr Dale Tweedie

As a senior research fellow in the International Governance and Performance (IGAP) Research Centre at Macquarie University, Dr Dale Tweedie specialises in business and professional ethics, and workplace organisation and governance.

He is conducting research into management accounting ethics, not-for-profit governance and the ethics of performance management. Before becoming an academic, he worked as an accountant at PricewaterhouseCoopers.

Macquarie University researchers are seeking participants for a study into people’s experiences of performance appraisal or management in their workplaces. For details, contact Dr Dale Tweedie on [email protected]

Siobhan Gallacher

Siobhan Gallacher is the HR director for Accenture Australia and New Zealand, a position she has held since 2007. She is responsible for all aspects of HR, including Accenture’s human capital strategy, performance management, compensation and benefits, employee relations, diversity, workforce management and recruiting.

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