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Wednesday, October 22, 2008

Death to the Performance Review!

I came across a blog post on the Lean Blog about “Professor Channels W. Edwards Deming and Writes "Get Rid of the Annual Review” that comments an article in the Wall Street Journal by Dr. Samual Culbert, a Professor at UCLA Anderson School of Management. The premise of the article is that 

“It [Performance Reviews] destroys morale, kills teamwork and hurts the bottom line. And that's just for starters.”

Amazing, finally somebody has successful articulated exactly how I feel and what I want to say after every performance review that I have ever experienced. I am sure many of us have experienced this inexplicable sense of anguish, desperation and “I am not good enough” that follow the days after a performance review. It doesn’t matter how many positive and how many “great”, “excels in”, and “could not do without you” comments you get. We always focus on that one “needs improvement” or “could do better” comment that is probably in there, as Prof. Culbert points out, to justify the pay increase (or not) that has nothing to do with your performance.

“It isn't, "How are we going to work together as a team?" It's, "How are you performing for me?" It's not our joint performance that's at issue. It's the employee's performance that's a problem.”

I believe that the practice of performance reviews is in fact a symptom of lacking leadership skills. In this modern age we love the new shiny tools, and the diet pill. There is no substitute to the social interaction and personal sacrifice that a leader needs to exert in order to create a winning team. Dr. Culbert points out, which is so much in line with my experiences - it brings a chill to my spine:

“Instead of energizing individuals, they are dispiriting and create cynicism. Instead of stimulating corporate effectiveness, they lead to just-in-case and cover-your-behind activities that reduce the amount of time that could be put to productive use. Instead of promoting directness, honesty and candor, they stimulate inauthentic conversations in which people cast self-interested pursuits as essential company activities.”

When lacking skill we naturally look for tools as a substitute. If you don’t know how to fix a car, then it certainly will not help to use the expensive wrench. The scary part here is that there are even software tools for this! You need to acquire these skills and expertise, which in the case of leadership requires both years of experience and some fundamental personal traits that not everybody has. 

As Dr. Culbert also points out we love to measure, yet measuring requires some kind of baseline.
“In almost every instance what's being "measured" has less to do with what an individual was focusing on in attempting to perform competently and more to do with a checklist expert's assumptions about what competent people do. This is why pleasing the boss so often becomes more important than doing a good job.”

We love quantifying for many reasons, but it does not work for everything, especially when it comes to leadership and team work. It is another example of “Quantifying the Unquantifiable”.The end results are much more destructive than they are helpful or performance enhancing. Mark Graban points out in his blog post that this is very much in line with the teachings of Dr. Demmings. Demming in fact pointed out: 

"Running a company on visible figures alone is one of the seven deadly diseases of management. "

I have had this blog post bottled up so long that just finally writing it feels good. Thank you for the inspiration Dr. Culbert, I am now officially a fan!


Unknown said...

Hear hear! Performance reviews are one of the most cynical, irrelevant, and demoralising time-wasting activities any organisation can undertake. As you say, in well-led companies, feedback is continuous and you always know how you're doing, because you know exactly how the organisation is peforming, and your role in that performance. Thanks for helping lift the curtain on the naked emperor!

Gilad Langer said...

Thanks for the feedback.

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