A Counterproductive Cycle: Why Performance Reviews Backfire

One of the most dreaded times of year for employees and managers alike is performance review season. From the countless hours spent trying to  recollect, describe and assess the work of individual contributors from the past year to the painful process of having to rank them on a set scale, performance reviews force managers to adhere to system that may not accurately fit the composition and needs of their business. The most damaging aspect of the current performance review system is that can lead to a disengaged workforce in a process that often backfires.

Bottling Up Feedback Makes Changing Behaviors More Difficult

Waiting until the end of a year to finally give feedback to help an employee improve their performance is essentially setting them up for failure. By then, they’ve possibly continued any inadequate process they have and used it in all their work, making it seem almost impossible to shift or achieve success because the problem has spread.

Instead, providing real-time, informal feedback sessions directly following some disappointment in performance have been shown to result in an actual improvement in performance. Sam Culbert, who teaches at UCLA’s Anderson School of Management, explains, “The alternative is people talking candidly — we don’t want reviews, we want previews. The boss’s job is to fill in the gaps and accomplish results. It’s not to give report cards.”

We don’t care about you, and twice a year we’re going to tell you what the company wants

In other words, simply “nip it in the bud”: Be sure to develop a culture and implement the tools necessary to make it easy to talk about the important issues when problematic performance is just emerging–not when it has been ongoing for a year.

In addition, the millennial workforce has very different expectations regarding feedback at work, largely established from the shift in technology. “They put something on Instagram, and in 15 to 20 seconds they’re expecting to know if it’s any good or not. So it’s crazy for them to come into a workplace that’s like, ‘We don’t care about you, and twice a year we’re going to tell you what the company wants,’” says management adviser Marcus Buckingham.

Social Awkwardness of Performance Reviews

The “sit down with your manager and review the year” model feels inauthentic because it fails to take into account the social context of the workplace. Leaders have to shift from inspiring, supporting, and mentoring employees to awkwardly becoming “judicial evaluators.”

Unless a manager is a master of providing feedback tactfully, the meeting can quickly spiral into a tense and defensive conversation for both sides. Neither may know how to handle the giving or receiving of news that may seem terribly out of step with what projects are currently going on in the moment since performance reviews only happen once a year.

A Brew of Hostility and Resentment Destroys Connection

Quite literally – the connections in the brains of employees can shut down from the performance review. Waiting to dole out a year’s worth of feedback can result in performance-crippling emotions for employees who may have been striving hard but receive neutral or negative feedback. In fact, according to David Rock, the author of “Your Brain at Work” and the director of an institute aimed at applying neuroscience to leadership issues, “people’s fields of view actually constrict, they can take in a narrower stream of data, and there’s a restriction in creativity.” Once someone’s status is threatened and the heart and soul they have put into their work is reduced to a single rating, activity in the brain actually diminishes and can trigger disengagement for the rest of the day or even the rest of the year.

The boss’s job is to fill in the gaps and accomplish results. It’s not to give report cards. Click To Tweet

Even worse, according to research completed by psychologists, “performance rankings can lead to destructive internal competition, which can make it tough to build a culture of knowledge sharing. In addition, there seems to be a self-fulfilling prophecy at work, in which a person who receives a poor evaluation does even worse in the subsequent rating period.”

With data showing that performance reviews only generate a 3 to 5 percent improvement in employee performance and satisfaction with the efficacy of performance reviews down from more than 50 percent a decade ago, 85 percent of companies surveyed are now making changes to their processes.