Nielsen Advisors

Yet again we have a credible source saying we should do away with the Performance Review. In late 2008, UCLA Professor Samuel Culbert offered seven reasons why performance reviews are "ill-advised and bogus." Among those reasons: Performance Doesn't Determine Pay, Objectivity is Subjective, Personal Development is Impeded, and Disruption to Teamwork.

Culbert has now released a book titled "Get Rid of the Performance Review: How Companies Can Stop Intimidating, Start Managing – and Focus on What Really Matters" in which he makes the case that performance reviews "produce no results of any value."

But if you don't conduct performance reviews how do you manage performance? Before answering that question, let me give you an example from my experience of where performance reviews clearly did not produce results of any value.

One services organization of about 250 account executives I worked with was coming up short on their revenue goals. With a little digging and some analysis, I learned that almost 20% of employees were not delivering results equal to or better than their goals. This was happening consistently with credible and achievable goals. The surprise was that almost 80% of these under-performers had received acceptable performance reviews.

There didn't appear to be any correlation between the individual's performance, and their performance review -- in essence the reviews/ratings said, "It's OK to miss your goals; it's OK to not meet your objectives; we'll just keep you on and pay you anyway." Not the message this organization needed to be sending to its employees.

Is it time for you to stop the practice of performance reviews? Maybe. Regardless of whether you continue them or not, what are the practices of good performance management?

A number of years ago, I found some information from the Corporate Leadership Council on factors that influence performance. The key points of the results of their research were:

• Emphasizing performance strengths in a formal review has a 31.2% direct impact on increasing performance, and a 36.4% total impact on increasing performance
• Emphasizing personality strengths in a formal review has a 21.3% total impact on increasing performance
• Emphasizing performance weaknesses in a formal review has a 25.2% direct impact on decreasing performance, and a 26.8% total impact on decreasing performance
• All other factors have a less-than 10% total impact on changing performance

So, if you're like many organizations and haven't yet done away with the performance review altogether, make sure managers put an emphasis on capitalizing on strengths rather than on fixing or mitigating weaknesses.