01/11/2013 12:05 EST | Updated 03/13/2013 05:12 EDT

Why Performance Reviews Are a Sham

It was just that time of year again and everyone was dreading it. No, I am not talking about the recent holiday shopping madness, the traffic, the congestion or the lines. I am talking about end of year performance management.

The year just officially ended, and companies the world over are sleep walking through the motions. It is not just the employees who dread the process, its human resources and management. It is not fun, it doesn't work, but yet, here we are all over again. I have been on both sides of this in my career and whatever way you slice it, the process is broken.

Let me give you an example of the process from a company I used to work for. Management would meet during the late part of Q3 to start the calibration process where employees would be force ranked into 20/70/10 splits (20 per cent exceeds expectations, 70 per cent meets expectations and 10 per cent need improvement).

Managers would have their people ranked prior to going into this meeting, and the politics would ensue. One manager would make a case for their employee having a great year and exceeding expectations, while another would do the same. This would go on and on, until each employee was placed into a rating category.

Coming out of the calibration session, employees would be given until the end of November to write up their self-evaluation. But here is the catch; the employees didn't know the results of the calibration session. So the business, in effect, is asking each employee to spend a few hours of their time writing up a review that will have absolutely no impact on the final rating. It's already been determined. And the employees know this, but they comply. They check the box, they meet the deadlines. They've been told this is the system of record.

So here are a few tips on how to shake things up:

  1. Create a structure that incorporates and gives weight to employee and peer evaluation
  2. Get rid of the formal performance evaluation process
  3. Coach your people daily
  4. Do not be so rigid on the 20/70/10 split. In fact get rid of it (this takes time and a serious psychological overhaul- but it can be done)
  5. Employees cannot be continually told that if you want to move forward in the organization, your next boss will want to see what you have done. This official story is instead urban and urbane legend. But how often does the hiring manager just ask for the rating? Most don't look into the details written by the employee. They ask for the rating and they ask the old manager how they did.

In other words, it is all much ado about nothing. And serves as proof that this is the most shameful farce of the year.