What’s Wrong With Performance Reviews?

This post will explore 12 issues that make many performance reviews unproductive and outdated and share emotionally intelligent strategies to improve the performance review process.

Many organizations are having their annual performance reviews this time of year. What should be one of the most beneficial conversations of the year between employees and their supervisors are often anything but.

The Harris Poll (2023) presents a harsh reality for many employees today and why their performance review may be full of anxiety, uncertainty and fear.

• Bosses are setting unreasonable expectations (51%), micromanaging (49%), and credit-stealing (48%).
• 53% of American employees are working on weekends, holidays, or days off because of their bosses.
• 71% of American workers have had a toxic boss, and 31% are currently working under one.

Whether the employee’s boss is toxic or not, this is an anxiety-producing conversation that impacts their finances, family and future. It is high stakes, like the Super Bowl, of development conversations.

Research gathered by 6 Seconds.org, an emotional intelligence organization, found:

• 66% of employees are strongly dissatisfied with their performance reviews and 95% of managers are dissatisfied.
• 13% of employees and managers think their system is useful and only 6% of CEOs think they are useful in a study by Leadership IQ of 48,000 employees.
• Fewer than 20% of employees feel inspired by their reviews. (Agovino, 2023)

So, what makes these important conversations so dire? Why does a significant company process have such bad results?

The "Dirty Dozen Problems" of Performance Reviews

1. Anxiety — Both the employee and reviewer are highly anxious in this significant conversation. Most likely the boss is not at their best and the employee is selectively listening. The "conversational IQ" is lowered.

2. Training — In many organizations, there is limited or inadequate training for reviewers in giving an effective review.

3. Infrequent feedback on performance — Leaders don’t give real-time feedback when it would be the most effective. Only 60% of employees agree or strongly agree with this statement: “My manager regularly provides effective feedback that helps improve my performance.” (Quantum Workplace, 2023) Meeting individually with direct reports get rescheduled or ignored for the crisis of the day.

4. Inconsistent alignment among reviewers — Each leader may have their own unique definitions of the evaluation system, such as what is exceeds or meets expectations.

5. Leaders under-prepare — The fast pace of business today leaves little true reflective time to put in the quality efforts that these are challenging conversations deserve.

6. Stale and limited specific data — The data on past results may be expired, stale or not relevant to current performance. The feedback had a limited fresh window where the receiver could actually hear, digest and possibly make significant changes. “…very few positions have quantifiable outcomes that can be considered a measure of competence, talent or success.” (Agovino, 2023)

7. Negative snapshots dictate — Old, outdated assumptions are hard to die and influence or bias the reviewer. Past mistakes or errors linger on in the narrative. If the employees did make changes, are they significant and consistent enough to erase the “there they go again” story?

I tell our clients they have to first make changes, hard enough, and second initiate a public relations campaign to initiate the new narrative or brand. Here their boss can help create a “collage of positive snapshots” to counter the four to five snapshots that engendered the negative impression. More reality and fairness will be in the 20 or so snapshots than the four to five snapshots chiseled into the first or easiest story of the employee. (See here for more information on snapshots.)

8. Progress is hard to see — Any actual progress the employee made can be subtle and hard to see and measure. Change happens in small increments. The conversations about progress help identify the efforts to continue.

9. Cognitive dissonance — Self-justification to reduce discomfort. Because of the uncomfortable nature of the review and cognitive dissonance, reviewers may not give significant feedback for improvement and accept a performance that is good enough. They may also be blind to improvement opportunities because they would have to embrace the awkward conversation and it is too easy to take the path of least resistance. Most likely all this occurs unconsciously.

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10. Communications skills — These differ between reviewers and thus impact the review's effectiveness and overall consistency in organizational alignment.

11. Empathy skills — These differ between reviewers and thus impact the review effectiveness by truly understanding the employees’ situation and how to support them. It also impacts the overall consistency in organizational alignment.

12. The review is more about the reviewer’s biases — In a study of 5,000 managers, 62% variance in the review comes from the rater tendencies, and 21% variance from the actual ratee’s performance. So, the review is three times more reflective of the boss than the employee (6 Seconds.org, 2023) for all the reasons above.

Gallup (2018) reports, “Managers tend to be ineffective at subjectively evaluating performance because implicit human biases distort our capability to objectively evaluate other people.”

Today’s workers are looking for something more from work. Can they be a part of something they feel is meaningful to them? Do they feel they have a seat at the special table and have a voice? Are they acknowledged for their progress at work? Are their strengths being utilized and stretched?

“They want a coach, not a boss. They want clear expectations, accountability, a rich purpose, and especially ongoing feedback and coaching.” (Wigert and Harter, 2018)

This a lot of responsibilities for the manager. You have up to 70% influence on their engagement and productivity. Your conversations short and long matter. Your words matter. Your tone matters. Your expressions matter. All are visible and can be easily misinterpreted. The review is of the utmost importance and can be made easier with ongoing conversations and feedback. Here the quantity of conversations can increase your effectiveness.

In my next post, I will go over best practices and tools leaders can use to make the review process right.