Here's my bias. I believe performance evaluations are a waste of time; however, I will also tell you they can be impactful for your business IF you do them differently.
Here are three reasons not to do them and how to evolve them into a more meaningful exercise:
Managers Don't Want to Do Them
The dread you see in people-manager's eyes starting around the end of October each year; its performance review time in most organizations. Managers despise having to write evaluations, typically because they aren't very adept at that kind of writing. Additionally, there is confusion and controversy with rating scales. What does a 5 mean? Is a 3 really average or slightly above average? Then there's the ever joyful event of delivering the feedback, which is where most really blow it.
Does the commentary and ratings managers are forced to give truly reflect past and influence future performance?
No. So what should you be doing differently?
You must be able to measure and communicate real-time performance, and do so at the team level. Leaders need to be able to look within their organization's teams to see patterns and levels of engagement in order to drive performance. Train the managers of those teams on how to deliver meaningful, timely feedback and throw out your rating scales.
Employees Don't Want Dated Feedback
The data we share with employees at review time is out-of-date. Even if your organization reviews performance on a quarterly basis, it is still a trailing indicator. Do you think your employees want you to make decisions on their pay or promotion based on old data? Of course not and they'll call you on it as it's only natural to take a defensive posture on statements that could impact finances or reputation.
Sans an incredible technology tool that provides this information on a mobile device, what can you do differently?
Weekly check-ins and proactive conversations. The weekly touch points are for current performance and the proactive conversations are helping to course correct or prepare for what is on the horizon. The best performance managers are in constant contact with their teams and are providing real-time data to make people better.
It's Bad Data That Doesn't Drive Your Business
Marcus Buckingham claims performance evaluation data is bad date because of the idiosyncratic rater effect. He claims this effect means 61-62 percent of manager's ratings of employees is a function of them as rater vs. the employee being evaluated. We are assuming a manager's rating of his employee is a reflection of that employee, when it's not. Therefore, the decisions made on this data are also not about the employee.
Not only is that an issue for your employees, it's an issue for your business.
What drives your business? Effective leaders that employees want to work for.
Spend your time assessing your leadership talent pre-hire and developing them post-hire, and you'll be assured to get better performance out of your employees.
Banish the traditional, rating scale, backward looking evaluations in favor of real-time, weekly with proactive dialogue to truly drive your organization's performance. Your managers and employees will thank you!