Performance Reviews – What’s the Value?

For many companies, it’s that time of year again – annual performance reviews. What value do you see performance reviews providing to the employee? To the boss? To the company? What role do you think they should (or should not) play?

Do you agree with Samuel Culbert, who recently published the article Get Rid of the Performance Review! in the Wall Street Journal?
“Inevitably reviews are political and subjective, and create schisms in boss-employee relationships. The link between pay and performance is tenuous at best. And the notion of objectivity is absurd; people who switch jobs often get much different evaluations from their new bosses.”

Or do you align more closely with the viewpoint of Jim Holincheck of Gartner Research who wrote in his HCM Software Blog on Keep the Performance Reviews.
“There is certainly plenty of research that shows that the relationship between subordinate and boss is the important factor in employee engagement (and ultimately productivity and performance). There are plenty of bosses who do performance reviews and have good relationships with their employees. They are not mutually exclusive. If a subordinate does not trust the boss, regardless of whether or not there is a performance review, there are going to be issues.”

While we at Globoforce see the value of annual performance reviews and use them ourselves, but we also practice what we preach with the use of ongoing, frequent and timely recognition as the most effective means of performance management.

When deployed according to best practice so the strategic employee recognition program is available as a peer-to-peer option as well as manager-to-employee, recognition becomes a positive and ongoing form of 360 degree performance assessments in which anyone in the organization can comment on the contributions and effectiveness of their teammates. These “recognition assessments” and kudos can then be used during the annual performance review as an additional data point on the strengths (John has been recognized repeatedly for innovation) and even weaknesses (but John has been recognized only once for teamwork) as potential areas of improvement.

This presents a much more rounded view of an employee's contributions that managers may not even be directly aware of. What do you think? Tell us in comments.

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