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Rethinking Employee Evaluations

* Most firms use them but are unhappy with the process. Some observers say the concept needs to be updated.


Performance reviews can be agony for managers and subordinates alike. Managers dread them, fearing challenges and damaged work relationships--never mind the lost hours filling out forms. Subordinates worry that less-than-stellar ratings will mean a puny raise or placement on an upcoming layoff list.

Although eight out of 10 American workplaces use the review process, about 90% are dissatisfied with it, said Michigan-based labor attorney and organizational trainer Tom Coens and consultant Mary Jenkins, co-authors of "Abolishing Performance Appraisals: Why They Backfire and What to Do Instead" (Berrett-Koehler, 2000).

Coens and Jenkins believe performance reviews are a remnant of an earlier era and may not be appropriate for today's workplace.

"For so long, we've been redesigning appraisals because of their dismal track records, and to little avail," Jenkins said.

The process remains an imperfect means of measuring and rewarding employee behavior, despite hundreds of books, articles, instructional videos and symposiums on the procedure and ways to reinvent, reform and revitalize it. But is there a better way?

Coens and Jenkins say yes. "Appraisals try to serve several different functions, which is part of the problem," Jenkins said. "We would suggest 'debundling' the functions--organizational improvement, feedback, coaching, development, compensation decision-making and legal documentation--and assigning individual systems to handle each."

Harried managers might grouse about the preparatory work needed to do this, Coens and Jenkins concede. But in the long run, they say, the managers and their organizations might benefit.

Motivation to change, the fuel that sparks improved performance, must come from within employees. And performance appraisals aren't crafted to address that. Their paternalistic nature is partly to blame.

During reviews, supervisors in parental roles critique behaviors of employees in children's roles and mandate specific actions to be changed. Rewards and punishments are meted out accordingly.

Supervisors, rather than employees, control the scheduling of the sessions. However, feedback would be better utilized if it were initiated by workers, Coens said.

"The fact is, people are pretty eager to learn how they can be more effective in their work," said Lynn Summers, vice president of research at Performaworks in Raleigh, N.C. Summers advocates employee performance management, in which the supervisor provides coaching and feedback throughout the year.

Tougher Than Ever

Coens and Jenkins acknowledge that the performance review process isn't about to disappear from the corporate landscape any time soon. And for those who must give reviews, challenges are mounting.

Bosses have less time to observe staff. A growing number are being asked to supervise from afar, sometimes miles or states away from their employees.

"I ask people, 'How many of you can remember when your boss spent uninterrupted time for an hour reviewing what you do?' " said Joseph Weintraub, professor of management at Babson College in Wellesley, Mass. "And this is the person who's determining how much money you'll be getting."

Many bosses in today's workplace don't understand their subordinates' jobs, so are not able to appropriately coach them or suggest concrete ways in which they can improve, Coens said.

Some, overworked and short of time, haphazardly fill out reviews or commit the "recency error": They focus heavily on employees' latest work and all but ignore their past months' contributions.

"The tone of the review ends up being based on the last project the person worked on before the boss filled out the review," said Bill Coleman, vice president of compensation for in Wellesley, Mass.

Others, hoping to avoid conflict and shattered relationships, give their employees overly positive reviews or allow employees to bully them into raising ratings. Or they'll commit another offense: They'll decrease ratings to comply with budget restraints.

"It happens more often than anyone would be willing to admit," Coleman said.

Many of these scenarios can give rise to legal problems later on, said Jerome Hoffman, chairman of employment practice group at Dechert law firm in Philadelphia.

Are They Even Fair?

As workers depend more heavily on colleagues to get jobs done, the task of reviewing individual performance is becoming murkier, Coens said. Can team members be fairly appraised when their outcomes are dependent on the contributions of their peers?

It's unlikely, experts say.

"There are so many things in the system that have a huge impact on your performance, yet your ability to control them is minimal," said Jerry Newman, professor of organization and human resources at State University of New York, Buffalo. He cited as examples technological breakdowns and quality control problems.

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