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Banish the Performance Review?

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Banish the Performance ReviewSamuel Culbert is a professor of management at the UCLA Anderson School of Management in Los Angeles.  Culbert recently published an article in the Wall Street Journal entitled, “Get Rid of the Performance Review!”.

Culbert’s theory is that, rather than contributing to workplace management, annual pay and performance reviews are destructive of workplace relationships.  He calls the “one-side-accountable, boss-administered review” “little more than a dysfunctional pretense”.  He says they are “a negative to corporate performance, an obstacle to straight-talk relationships, and a prime cause of low morale at work”.

This sort of revolutionary talk will be shocking to the average human resources manager.  The annual pay/performance review process is not only integral to many human resources strategies, it is their reason for being.

Many human resources managers adhere to the “if you can’t measure it, you can’t manage it” school of thought.  That being the case, taking away the annual pay/performance review process might be viewed as leaving the human resources structure as little more than a shell of hiring, benefits provision, and firing.

So it may well be that Culbert’s theory won’t – for the moment – gain much traction in the human resources world.  He admits as much by inviting readers to call him “dense” and an “iconoclast”.

From the perspective of the employment lawyer, there is potentially much to like about the annual performance review process.  In theory, at least, it forces the employer to engage in some form of assessment and documentation of employees’ strengths and weaknesses.

Many an employment lawyer, confronted by an employer client who wants to fire an employee summarily for just cause, has been left wanting in response to the question, “Where’s the paper trail?”.  We know that a progressive disciplinary response is the proper approach to managing employee misconduct.  To a lawyer, the only reliable evidence of ongoing misconduct is the resulting accumulation of paper in the employee’s personnel file.

Try standing in court, representing an employer, attempting to convince a judge that, notwithstanding the absence of even a scrap of paper, the employer has established just cause for summary dismissal.  I wish you good luck in that regard.

On the other hand, it has been my experience that performance reviews dutifully completed, signed, and filed year after year, can undermine the just cause position rather than bolster it.  That is because managers tend to shy away from documenting anything truly critical about the employee.

Performance reviews tend to be filled with odds and ends of comments encouraging better performance in various “areas of improvement” but often fall short of identifying actual shortcomings.  In the end, such reviews probably don’t serve any real purpose.

They give the employee the false impression of accomplishment, they fail to identify conduct which may some day need to be relied upon, and they consume a whole lot of valuable time and resources.  From the employment lawyer’s perspective, it would be preferable to have no review at all rather than one which fails to accurately capture the employee’s performance and conduct.

Perhaps Culbert is correct.  Maybe the workplace would be better off without performance reviews.

This may be one of those areas in which a healthy dose of “what if?” thinking might result in a better process.  What if we didn’t conduct annual performance reviews at all?  What if we replaced the performance review process with something like what Culbert is suggesting?  What if we dealt with employee conduct and performance issues by simply weeding out the non-performers?

There are many possible alternatives to the traditional pay/performance review process.  But, inertia being what it is, it will take a courageous human resources manager to adopt a different methodology.

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