Performance Reviews Get an 'Unsatisfactory' From Experts

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Oddly enough, the New York Times health blog has an item on performance reviews, which suggests that they're probably a bad idea.  In theory, they may enhance feedback between manager and employee.  But in practice, employees should be getting feedback a lot more often than once a year, and performance reviews may embody the wrong sort of feedback.

Annual reviews not only create a high level of stress for workers, he argues, but end up making everybody -- bosses and subordinates -- less effective at their jobs. He says reviews are so subjective -- so dependent on the worker's relationship with the boss -- as to be meaningless. He says he has heard from countless workers who say their work life was ruined by an unfair review.

"There is a very bad set of values that are embedded in the air because of performance reviews," he told me.

Not every expert agrees that reviews should simply be abolished. Robert I. Sutton, a Stanford University management professor, says they can be valuable if properly executed. But he added, "In the typical case, it's done so badly it's better not to do it at all."

All this is, of course, from the perspective of the worker.  But from the perspective of the employer, the review may not exist to make employees more effective, but rather, to give companies a paper trail.  Lawsuits brought by ex-employees for discrimination or other unlawful behavior probably aren't as common as human resources managers might think--but even one such lawsuit is one too many.  So companies like to document a record of poor performance and warnings before they fire someone.

This doesn't actually mean that jobs are any safer: if before, a boss could fire you because he didn't like you, he can now write you a bad performance review, and then fire you because he doesn't like to.  But no one ever said our tort system made a whole lot of sense.

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Megan McArdle is a columnist at Bloomberg View and a former senior editor at The Atlantic. Her new book is The Up Side of Down.

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