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EMPLOYEE RECOGNITION

Why Performance Reviews Don't Work-And What to Do Instead

What if your peers decided your bonus?
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In his book, Get Rid of the Performance Review: How Companies Can Stop Intimidating, Start Managing and Focus on What Really Matters, Samuel Culbert, professor at UCLA Anderson School of Management, calls traditional employee reviews "destructive and fraudulent" displays of "power and subordination."

Is that just one man's opinion?

Nope. Management consultant Aubrey Daniels argues that performance appraisals can be ineffectual and even counterproductive. He points to a study by the Society for Human Resource Management that shows nine out of 10 performance reviews are unsuccessful. Or--as 2010 study by Psychology Today puts it--the reviews are "painful and don't work" and, furthermore, they "produce an extremely low percentage of top performers."

And yet 99 percent of companies still do them.

Then there's the progressive 1 percent--like Ottawa-based software company Shopify and San Francisco gaming powerhouse IGN. Both companies now use a crowd-sourced rewards program that goes something like this:

1. Twice a year, all employees receive an equal number of reward tokens, each one worth some monetary value.

2. Employees award these tokens anonymously to their colleagues as recognition for outstanding work. You can give all of your tokens to one individual or distribute them evenly, but you must distribute them all to colleagues outside the C-suite.

3. Bonuses are allocated accordingly, and the company publishes the high, low and average number of tokens received by employees.

"People (working) in the shadows before are brought to the spotlight," says IGN vice president of HR, Greg Silva, in a 2011 Fast Company article.

Others who lag behind the average are motivated to earn more tokens. And, believe it or not, biannual subordination rituals (i.e., performance reviews) are requested by no one.

This article was originally published at The Build Network.

Last updated: Jan 9, 2014




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