by Lisa Campi

Created on: July 04, 2009

Say the words It's performance review time and I guarantee that you will receive a wide range of reactions, ranging from positive to negative, from elation to disappointment. When I posed this question to a group of project managers at a job forum lately, I mostly received groans and complaints about their companies' performance review systems and the tools used for those reviews. In our discussion, we concluded that in most cases performance reviews, as they are currently conducted in many companies, provide few redeeming features to companies, managers or employees.

According to organizational management theory, performance reviews provide employees with a snapshot and review of their work performance over a period of time. These reviews may or may not be tied to any financial rewards, but provide an employee with a basis to judge their performance in comparison with their peers. However, in some companies, employees must be ranked on a curve, similar to the process used to assign grades in high school, with a fixed percentage of employees being assigned to each category, such as 10% get A's, the next 30% are B's, etc. This type of system does nothing to reward employees who met corporate strategic goals, met all of the assigned objectives but still only received a B rating because others did extra credit. In these circumstances, a manager cannot assign an employee an objective with a definitive, well written means to meet an A rating as it all depends on what other employees do. In effect, this minimizes the managers' ability to motivate and coach employees, as managers generally cannot know how employees can obtain A's until all performances are reviewed. If managers cannot provide employees with the coaching necessary on how to obtain an A rating, how can employees trust managers to coach them? This proved to be one of the biggest drawbacks of performance reviews, as they have to be written to fit the bell curve of the peer group, not how the manager really believes the employee did.

From a company's standpoint, performance reviews provide a means to reduce legal liability in case of firing or lay offs. These performance documents are used to protect the company, but require significant time and staff to administer, and in many cases, require specialized software tools to be installed on corporate systems, all of which cost firms money. This same money, and in most cases probably less money, could be spent on training managers regarding

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