Once your organization start talking about performance reviews you usually hear about some formal system with the same structure for everyone involved. That doesn’t really sound like a good idea, right? Why companies are using this approach then?
If you have like a couple hundred people on board C-level exec can’t really say anything reasonable about vast majority of people in the organization. However leaders have to make some decisions basing on employees value, like firing rotten apples or promoting best candidates for managers.
This is the point where management is tempted to build an appraisal system which makes it possible to compare people easily, so all these decision can be made basing on hard data. The system ends up as stiff and structured checklist which produces grades in the same categories for each employer.
And this is utterly wrong.
Actually I believe you can hardly do worse. This approach not only makes an illusion of producing comparable results but also harms relations between managers and their subordinates since performance reviews following this pattern just suck.
Do a simple exercise: take a description of a few requirements and send them out to a bunch of managers working in software development teams. Now ask them to judge each feature in a few categories in a scale from 1 to 5. Let them judge difficulty, work consumption, innovativeness and business value. Grab these numbers from managers and compare them.
You will see that someone hit average of 3,5 and another barely 2,5. You will see how differently people look as specific categories. You will see how vague one-word category definitions are. Basically, you will learn what subjectivity means.
Now, I have a message for you: people are hell lot more complex than software requirements.
If you used the same system for people what you would get is a set of top marks for a handful of organization’s gurus, handful of worst grades for a bunch of incompetent slackers and like 90% of random results for the rest of people.
In uniform appraisal system this is taken as reasonable data which decides on a number of things, starting with promotions and money and ending with general respect. These numbers make or break careers. And yes, I’ve just called this data random.
But that’s not the worst thing which is introduced by uniform appraisal system. Yes, it can be worse.
Formalized, homogenous appraisal system degrades performance review to simple mark trade instead of making it an occasion to exchange feedback.
You get what you measure. If you measure few criteria, and these criteria are uniformed among the organization, you create incentive to fight about better marks, so people would get more money, have better chances for promotion and would be able to boast in front of their colleagues how cool their marks were on the last review.
There is a side-effect too. This approach creates an incentive for managers to run crappy reviews. Instead of focusing on two-way communication, learning what motivates their people, they just go through a simple script: programming three, communicativeness two, quality four, team work two, creativity five, next please. Hey, this is what the system expects from us, doesn’t it?
Running performance reviews is pretty damn hard job. I always feel stressed when I’m going to talk about one’s performance, no matter how official or unofficial it is. Yes, it is easier to just go through a number of marks and call it a day, but that’s not the option which works for reviewed people. Unfortunately not everyone understands that, so we should build systems which create incentives for positive behaviors, not the negative ones.
So while I don’t agree that performance reviews are evil in general, we can hardly think about worse approach in this area than a formalized, homogenous appraisal system which unifies measures among all employees. That’s just not going to work.