Ditch the Performance Review?

Once a year, you're called into the boss's office. You know it's coming -- the performance review. The conversation will likely determine your annual raise, define your relationship with your boss, and frankly gauge your happiness from 9AM to 5PM for 12 more months. Do you look forward to it or dread it?

UCLA business school professor Samuel Culbert believes that not only do we dread it, but it's a waste of time and energy and creates unhealthy competition. His new book, 'Get Rid of the Performance Review,' defines his personal campaign to change companies' minds and improve corporate culture. At the core of his theory is the performance "preview." Instead of building up to the stress of an annual conversation, Culbert wishes bosses would have two-way conversations constantly with employees, based on the idea that both the boss and the employee are "on the firing line to produce."

"It is management by intimidation," says Culbert of traditional performance reviews, "and it is guaranteed to give you a workplace where silence and fear trump candor and honesty; where employees say what they think the boss wants to hear rather than what the company truly needs."

The dreaded buzz words

According to Culbert, performance reviews are not objective and reward personality over performance. He created his own "dictionary" of terms that end up distorting the truth in a typical performance review, and can impact an employee's advancement.

  • Average employee: Not too bright
  • Aggressive: Obnoxious
  • Meticulous attention to detail: A nitpicker
  • Career-minded: backstabber
  • Loyal: can't get a job anywhere else

Solutions for happier employees

Among the solutions offered to employers by Culbert:

  • Make subordinates see that you understand their perspective.
  • Consider your subordinates' entire lives, understanding that doing well at work takes a backseat to doing well in life more generally.
  • Be specific with your feedback.
  • Avoid comparing employees with other employees.

Not everyone agrees

Some companies, large and small, swear by performance reviews. Rob Jager, president and CEO of West Palm Beach-based Hedgehog Consulting, is a fan.

"I use performance reviews, and couldn't go without them, because they provide a process to continually raise the bar on employee performance," he says. "If you went to school and never received a report card, would you think you're a genius or an idiot? I get a lot of blank stares after that, followed by, 'good point.'"

"They are the most valuable thing we can do every year," agrees Josh Yoder of Iowa-based Ramsey Creek Cabinets. "We can only change things if we are willing to admit things here are not perfect and take input from employees. Expectations need to be conveyed yearly and clearly, so all know what their goals are daily. We are all going somewhere together, let's be as happy as we can on the journey. Happy help equals good product equals satisfied customers."

Some companies sold on the idea

Ergotron, a Minnesota company that sells ergonomically correct furniture and devices, ditched the performance review and empowered employees. The company's turnover rate has dropped to 2.8 percent from 20 percent. In addition, open communication is demonstrated with their vacation policy: Vacation isn't tracked or accrued by human resources; all employees get five weeks off plus one Friday each month, all coordinated with their managers.

"Our employees are very aware of what needs to get done by self accountability, discussions, frequent and consistent communications and face-to-face discussions. We are able to perform and continue to produce more with a verbal communication performance process rather than paper," says Diane Kaufman, senior vice president of Global Human Resources for Ergotron. "By helping employees understand it isn't about pointing fingers and blaming others, we have no time for politics; it is about solving issues so we all produce together, fix issues and move on. And it works."

Next:Morning Person vs. Night Person: Who's More Likely to Succeed? >>

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