Annual performance reviews are under attack. Some experts even boast that employee performance appraisals are dead. But whether you support them or abhor them, one thing seems to gather common ground – the performance review process needs to be improved.  Many management teams are still unsure as to how to effectively leverage an employee’s review to produce positive – and ideally, productive – results. As a result the annual performance review is often seen as a worthless, time-wasting function.

The problem however isn’t the review itself but the lack of effective and ongoing feedback.  Receiving and giving feedback once a year just doesn’t work. The lack of consequential feedback can often undermine the effectiveness of a performance appraisal. For example, a landmark study on annual performance reviews published by the Harvard Business Review showed that employees often viewed any criticisms as disingenuous; instead, they believed that any negative feedback was an excuse to justify denying an employee’s request for a raise.

Just 23 percent of HR folks surveyed by the Corporate Executive Board say they’re satisfied with their organizations’ performance evaluations, down from more than 50 percent a decade ago.

Another study by Towers Watson reinforced the disappointing state of employee performance reviews.  After evaluating the responses from thousands of workers in a broad spectrum of industries, “The Shape of the Emerging Deal” report concluded that:

  • Only 38 percent of employees think their leaders have a sincere interest in their well-being.
  • Just 47 percent think their leaders are trustworthy.
  • Only 42 percent think their leaders inspire and engage them.
  • Only 53 percent think their managers have time for their employees.
  • 61 percent question how well managers deal with poor performers.

With such a diversity of employee and manager perceptions and biases toward managing performance better, a blindingly obvious question rises to the top:  why isn’t management addressing these issues head on.

While there’s no simple answer to these questions, Peter Garber, human resource consultant and author of “Giving and Receiving Performance Feedback”, argues that it’s not the answer that matters so much as the attention that these questions give to the issues surrounding performance appraisals .”The concept of increasing or decreasing the leverage associated with performance feedback needs to be decided by each organization, taking into full consideration the culture, norms, practices, expectations and objectives that exist,” Garber writes.  “Keep in mind that all of these factors will have a significant influence on the perspective of how everyone sees performance feedback in your organization.”