This week I read about Microsoft abandoning its “Stack Ranking of Employees” and then I read that Yahoo just adopted a similar approach to appraising employees. These review systems require managers to rank a certain percentage of employees as poor performers with the intent of removing them. Those supporting these performance systems claim that your company is stronger by removing your poor performers. The problem I have is managers are often forced to reduce ratings in order to meet the “bell curve” ensuring a percentage of their employees are below standards. What happens if you have a really good team where there are no poor performers? That really is not an unreasonable expectation. I believe these systems lead to a competitive, cutthroat environment that is not healthy. Employees are always worried for their jobs if every quarter there is a review and if you get a couple of reviews with low ratings, you are fired. If employees have distrust with these systems that the ratings are not fair, then fear is introduced. I do believe in healthy competition and higher rewards for those who take on more risks. When I read these articles, I am glad to work for a small, private owned company.
I also dislike self-evaluation performance reviews where the employee rates himself and the manager completes the same performance ratings. Then at review time, the employee and manager compare their rankings to foster a conversation on the difference in scores. For example if the skill is “team player” and the rating scale is 1 to 7 with 7 being outstanding. The employee rates himself as a “6” and the manager rates him as a “4”. In theory this difference in score should open a healthy dialog on why they have a different opinion. In reality the employee is thinking the manager does not appreciate him and his contribution. Any further conversation is all about defending the score instead of discussing accomplishments and future potential.
One of my best performance review was when a manager said to me, lets put the paperwork aside and talk. Since that wonderful experience, I have changed my approach. I typically like to provide the formal paperwork to the employee ahead of time to read. During the performance review meeting it is a conversation about what they accomplished the past year and where their career is headed. The performance review document is used as a roadmap to ensure pertinent areas are covered instead of reviewing it line by line. Below are a few questions that employees can think about before meeting with their manager.
- What were my important accomplishments over the past year?
- What were the challenges I had to overcome this past year?
- What do I hope to accomplish next year?
- What training or skills do I need to further develop over the upcoming year?
A performance review should be a conversation and not about defending numbers. Personally, I do not want to be defined by a “number” or a “rating”. I want to be known for my accomplishments. What are your thoughts on performance reviews and forced-rank systems?