End Performance Reviews?  Better Think Twice.

Beating out a piece on Trump’s Vietnam War deferments and the fact
that a computer hacker can take control of your car while you’re driving
it, the most read article yesterday on The Washington Post’s online
edition is about eliminating annual employee performance reviews.  I
don’t think this signals an end of Trumpmania or people’s ambivalence
toward controlling their cars; rather, I think it shows how much everybody hates performance reviews
Nobody likes getting them and nobody likes giving them.  While I’m
loathe to champion anything so unpopular, my experiences tell me,
without a doubt, that performance reviews can be an employer’s best
friend.  

The Post article explains that Accenture – a
huge tech company – is scrapping their performance review system in
favor of implementing “a more fluid system, in which employees receive
timely feedback from their managers on an ongoing basis following
assignments.”  The head of HR explains, “We’re going to evaluate you in
your role, not vis à vis someone else who might work in Washington, who
might work in Bangalore. It’s irrelevant. It should be about you.” 
Sounds great, right?  More fluid, more personal.  He had me at “vis à
vis.”

But, wait a minute, isn’t providing “timely feedback …
on an ongoing basis following assignments” what managers already should
be doing?  Why are the concepts of day-to-day feedback and an
annual evaluation not complementary components of an employee
development strategy?  Teachers hand out grades during the course of a
year and students receive a final grade at the end of the semester;
can’t employees be encouraged and developed for success in the same way?

The real issue with performance evaluations is that few managers like
to manage people, so many procrastinate until that inevitable day of
reckoning.  At that point, it can only be a painful experience for all
involved – the manager communicating to the employee that they’re
really not-all-that-great and the employee being shocked at hearing this
for the first time.  (And, by the way, you’re not getting a raise.)
 The solution, however, is not to scrap the annual overview evaluation,
but rather to train and expect managers to do the day-to-day feedback as
well.  The annual review should merely be the culmination of all that
feedback in one cohesive summary.  No surprises, no drama – and the
employee gets information needed for career development.

From a
legal perspective – cue the Darth Vader music – I view performance
evaluations as an essential risk reduction tool.  When an employee files
a discrimination or retaliation complaint against an employer, the
employer can defend the claim by pointing to a documented performance
issue that pre-dated the alleged illegal action.  If the annual review was performed and if
the manager accurately evaluated the employee, then the review serves
as Exhibit A for the defense. Ideally, there are written warnings and
maybe a Performance Improvement Plan in the employee file as well; but
if all else fails, an annual performance review can be an employer’s
lifesaver.

The key, though, is that the evaluation must be done
and must be done right.  So, considering both the employee development
and risk reduction roles of annual evaluations, how should employers
implement an effective process?

1.  Simplify performance
evaluations by having only essential, well-written criteria that are
tailored to each position and use a rating system that is as simple as
possible.  I suggest only 3 ratings of “Needs improvement”, “Meets
expectations,” and “Exceeds expectations.”  Make sure your managers
understand that “Meets expectations” is a positive rating; if an employee is under-performing in an area, “Needs improvement” is the only appropriate rating.

2.  Train your managers:

  • to
    view performance reviews as a complementary piece to a day-to-day
    feedback process that forms an overall employee development strategy;
  • to execute this strategy by providing daily feedback and conducting performance evaluations in a positive, constructive way;
  • to document performance issues when they arise.

3.  Hold you managers accountable for failing to manage employees.

So
be wary of an HR trend of eliminating performance reviews.  With a
little bit of planning and training, they can be tremendously beneficial
for both employees and employers.

Todd McKee is a lawyer who
focuses on employment law, business law, and nonprofit law.  He can be
reached at (615) 916-3224 or tmckee@mckenzielaird.com.

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