5 Reasons to Opt Out of Annual Performance Reviews

Image reading time for review

Image reading time for reviewThe snow on the ground and twinkling holiday lights visible during the 5pm commute home in the dark serve as reminders that December is upon us and it’s time to wrap up the year. Some may say it’s the most wonderful time of the year! ‘Tis the season for giving after all! Specifically, it’s the season for finding joy in giving with no expectation of getting anything in return. The Grinch in me finds it almost poetic that December also means it’s time for annual performance reviews—the season of giving hours of consideration to ratings, comments, and feedback with no expectation of experiencing change or rewards in return.

I’ve written before about my colleague who copied and pasted the same self-evaluation and ratings into his own performance appraisal three years in a row without anyone noticing, so it’s no surprise that I find annual performance reviews more of a paperwork exercise than a meaningful opportunity for feedback and development. But here’s what is a surprise. Although HR, managers, and employees alike loathe the performance review process, and research tells us that performance reviews have no effect on job performance, most companies are mass emailing their employees right now reminding them to complete their self-evaluation on time. It’s madness!

There’s a bit of a bystander effect when it comes to fixing a problem like useless performance reviews. HR may own the process because they facilitate and provide the platform for reviews, but they often feel like they’re at the mercy of leadership. Executives may loathe the process as well but are fearful of change and losing a metric that feels important. Managers are caught in the middle feeling like they have no voice or influence on the issue.

But because it’s the season of giving, we’re giving you 5 arguments you can use for opting out of your annual performance review:

  • It’s offensive. The only thing worse than making grown adults wait anxiously until the end of the year to receive their report card is the fact that before we given them the report card, we force them to evaluate themselves. It conjures up visions of my Calculus teacher handing out results from the last test and smugly asking “well, how do YOU think you did?” before placing the graded test on my desk. The grade was the grade, regardless of how I thought I did, and the same is true with performance appraisals. In theory, the self-appraisal is supposed to give the employee an opportunity to identify their own development/performance gaps and highlight forgotten shining moments, but they never have that effect. The manager has formed an opinion on the employee’s performance well before reading a single paragraph of text at the 11th At the risk of another holiday analogy, no kid ever convinced Santa to take them off the naughty list on Christmas Eve.
  • The data doesn’t support the claims. If you ask HR why you can’t abolish performance reviews, they will likely say that an annual performance review is critical data for evaluating year-over-year performance issues, skills gaps across the organization, and necessary documentation for compensation. Gather some courage and ask them to show you the data. Push back on the “critical data” argument and ask for evidence that shows as a result of some performance review findings, changes were made that had an impact on the organization. Don’t worry…neither the data nor the organizational change or investment exists.
  • The data is garbage. One of the most terrifying arguments heard for retaining performance appraisals is how important they are for documenting potential terminations and justifying compensation changes (or lack thereof). Those are two critically important aspects of people management that cannot be tied to an arbitrary system. While assigning a numerical rating to a performance area seems like it should add an objective measure to the appraisal process, it does nothing of the sort. This is what’s really happening behind the rating:
    • Even though John is struggling, Sam gave him a 3 to try to motivate him.
    • Sam received a 3 because his boss struggles with being direct.
    • Adam wanted to give his employee a 4, but then he would have had to give him a raise and there’s no budget for that, so he gets a 3.
    • Sue wanted to give her employee a 2, but she knows the employee’s spouse is out of work and she’s struggling to support the family and deal with financial stress, so she gets a 3.
    • The only person who didn’t get a 3 is Amy and that’s because her boss loves giving reviews. In fact, he reviewed 4 products on Amazon, 2 restaurants on Yelp, and 3 stores on Google just before Amy’s performance appraisal. Since 5 stars everywhere else in the world means “worked out great and I’d recommend to others” then why wouldn’t his employee receive 5 stars too?

What Joe considers a 3 is not what Mark considers a 3. And even though Sam gave Mary and Sara both a 3, he does not believe their performance is comparable. In a profitable year, a 3 rating on the performance appraisal may result in a 4% salary increase, while a 5 rating in a recession may result in 0% increase. Numerical ratings provide false impressions of data quality and consistency. And then, of course, there’s the minor issue of bias…

  • Nothing in the review should be new news. If the employee had a performance or behavioral issue in March that wasn’t revealed until December, then there’s a leadership problem, not a performance problem. Communication and feedback about performance should be constant and development needs should be addressed immediately with goal setting, action plans, check-ins, and follow-up. If those fundamental leadership behaviors aren’t consistent, then the surprise ding on a performance appraisal only serves to destroy trust and invalidate the review process. The best argument for opting out of the performance appraisal process is to express that you’ve already appraised performance throughout the previous 11 months of the year.
  • Offer an alternative. Change is scary for most people and replacing something with nothing is a tough sell. There are plenty of worthy alternatives to a traditional performance review. Pick one that fits your leadership style, team needs, and company culture and give it a try for a year. Whether it’s a solid 360 degree assessment or monthly mini-goal setting and progress discussions, the only option on the table shouldn’t be “to appraise or not to appraise?”