Performance Reviews: Who Are They Really For?

Jeana Quigley

Performance reviews are a hugely debated topic. It seems all you need to do is mention them within Businesspeople Meeting in Office hearing distance of a manager or HR professional and their ears perk up. That’s because we all have opinions on them.

This interest  in performance reviews inspired us to do a new survey—to dig down and get to the root of the problem. In May, we at BambooHR surveyed 1,933 people over the age of 21 who are currently employed in companies with more than 50 employees.

First, 42 percent of respondents’ companies aren’t doing performance reviews at all, which shows there’s a problem. Of the other 58 percent, 89 percent argue that their companies benefit from performance reviews—which might seem like they’re pretty happy. But are they? The important thing to note here is that companies are benefiting, not employees.

Performance reviews can be traced back as far as fourth-century China, and have been used routinely in the U.S. since the Industrial Revolution as a tool to help companies know which employees were performing well and which weren’t. That way, they could fire those who weren’t quite cutting it. Yet no one ever claimed that performance reviews are meant to help employees. And that’s where performance reviews are failing today.

Our employee-focused workplaces are feeling the struggle (and really, that’s true for most of us, because we know that our employees’ happiness is linked to our company’s success). While 75 percent of respondents feel they get good feedback during performance reviews, they don’t get much help implementing the feedback.

Here’s why only 16 percent of employees want to receive feedback at their performance reviews:

  • 67 percent feel they’re not heard during their reviews.
  • 62 percent don’t ever see changes occur from feedback they give during reviews.
  • 61 percent say their companies don’t look for opportunities to provide career development.
  • 56 percent say they don’t receive raises or bonuses when they perform well.
  • 55 percent say their companies don’t ever address concerns they brought up during their reviews.
  • 52 percent say their companies don’t help them either make or meet goals.

What it really comes down to is this: Instead of motivating and engaging your employees (only 4 percent feel that performance reviews are doing this), performance reviews are frustrating employees. People prefer to be inspired and motivated in the following ways:

  • Open, informal conversations
  • Getting raises
  • Having one-on-ones geared toward career path
  • Managers listening to their ideas and using them
  • Getting more employee recognition

 What does HR think about performance reviews?

You might not be surprised to learn that HR finds the practice of doing performance reviews (70 percent find them “very valuable”) more valuable to the company than the average employee does (only 24 percent consider them “very valuable”). However, we still have plenty of criticisms. Three out of four HR professionals have criticisms with performance reviews. Here are the top 5:

1. They create a culture of competition rather than collaboration.
2. They create unnecessary politics.
3. They are an inaccurate reflection of performance.
4. They hurt engagement and innovation.
5. Nothing constructive comes from performance reviews.

Performance reviews must change

Because companies and our workplaces have changed, performance reviews must change as well. Leaders know now that their companies’ success depends on employees. Let’s get our employee-focused workplaces in line with performance management.

Performance management should benefit both companies AND employees. To do that, they should:

  • Be simple: Managing performance should be an everyday experience, with ongoing guidance and frequent recognition — not a major project once or twice a year. Frequent check-ins that feel more like conversations will help you know how engaged and challenged they are. You can impact performance today.
  • Accurately reflect performance: How are employees performing this month, this week, or even today? Don’t focus on six months ago, or last year, and don’t wait months for the next scheduled performance review to bring up an issue or reward an employee. Details will be lost or seem irrelevant and won’t accurately reflect performance. Feedback should be timely and frequent.
  • Inspire and motivate: Don’t lose a chance to motivate and inspire employees today or help support their long-term goals. Help employees set goals and follow up often.

In HR, our goals are twofold: We want to see our people successful, and that in turn creates successful companies. Performance management must be focused on helping the employee. That will naturally create performance management that benefits both!

Jeana Quigley is the brand journalist for BambooHR, the leading provider of tools that power the strategic evolution of HR in small to medium-sized businesses. Check out the BambooHR blog! If you want to dig even deeper into the survey results, you can download the infographic and survey summary.

For more forward-focused thought leadership on HR issues, see The future of business: Human resources.