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BLOG REVIEW: “The Good, the Bad and the Ugly of Annual Performance Reviews”

BLOG REVIEW: “The Good, the Bad and the Ugly of Annual Performance Reviews” by Gordon Tredgold (Consultant, Author, FAST Leadership, Professional Speaker). Huffpost Business, 10 Feb 2016

Is your organization using annual performance reviews in evaluating employee performance? Are you and your employees satisfied with it? Does it give you a fair, objective and equitable assessment of your employees’ performance? Does it motivate or demoralize employees?

Gordon Tredgold, in his blog on the use of annual performance reviews, especially the Stacked Review System, admits that it is a means to identify good performers, poor performers, and those in-between, but he also highlights the shortcomings of the approach and the issues surrounding its use.

He sums up very well the good, the bad and the ugly points of annual performance reviews, as follows:

The good:

  1. Rewarding good performance and, thus, encouraging its continuation.
  2. Knowing the people who are not doing so well and providing the right support and encouragement to them.
  3. Identifying poor performers and letting them go.

The bad:

  1. The process takes too much time and effort and, thus, too much investment.
  2. Because the process takes too long and feedback is not provided in real time, performance of the employee being assessed might have changed in the intervening time (became better or worse).

The ugly:

  1. Employees sandwiched in-between good and poor performers, but who do a lot of the work, are overlooked and little motivated.
  2. The review is often subjective.
  3. Valuing the work of an employee against another becomes difficult when we rank them across departments/teams.
  4. The responsibility of the manager in managing performance is overlooked and absolved, when only employees are blamed for poor performance.
  5. The process becomes demotivating as the organization/company improves and people at the bottom rank improve and do well but still remain at the bottom rank. The company then eventually loses these people as they disengage and eventually leave.

A very succinct, yet clear and encompassing assessment of the traditional performance management approach, Gordon’s examples hit home as these are what employees, managers and heads of organizations have really experienced. Gordon’s original blog at Huffpost Business can be found at http://www.huffingtonpost.com/gordon-tredgold/the-good-the-bad-and-the-_12_b_9195944.html.

Gordon recommends a rethink of the approach and mentions Adobe as one company that has decided to revamp their performance review approach. Stanford Graduate School of Business has made available for download the pdf file of the case at https://www.gsb.stanford.edu/faculty-research/case-studies/adobe-building-momentum-abandoning-annual-performance-reviews-check.

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