The Future of Performance Reviews: Time to Rethink?

Three times in my life, very badly handled performance reviews have triggered me to walk away from jobs I loved. On each occasion, I was told my potential in life was limited. My opinion of these people's opinion was that my intrinsic value - and by that I mean my self-worth and not my financial worth please note - was worth more than their comments, and I walked off to seek a more meaningful future elsewhere.

At the time though each of these incidents hit me really hard. Although I was incensed enough to quit, each episode still left me mentally scarred. Was turning up and being the best I could be not enough? In time I came to realise that the limitation was not on my side, but rather on the capability, the mindset, and the circumstances at the time of each of myself, the reviewer, and the review itself.

What I see now with the benefit of years of corporate experience, not least dealing with the challenges of conducting many performance reviews myself, is that performance reviews are a materially contributory factor to the poor mental health status of the corporate world.

In today's fast-paced business world, performance reviews have become a staple in assessing employee progress and contribution. However, I caution you to consider and be seriously concerned about their actual impact within your organisation, particularly on mental health. It's time for companies to reassess this traditional practice and consider its implications. Let’s delve into why performance reviews might be doing more harm than good.

Loss of Productivity

Performance reviews, in theory, are meant to boost productivity by providing feedback and setting goals. However, in practice, they often lead to the opposite. The anxiety and stress leading up to these evaluations can significantly hamper an employee's ability to focus and perform effectively. This dread, often looming for weeks or months, can be a major distraction, diverting attention from actual work to concerns about the review process and its outcomes.

Suppression of Creativity

Creativity thrives in environments where individuals feel free to experiment, take risks, and think outside the box. Performance reviews, especially those that heavily focus on metrics and strict objectives, can stifle this creative spirit. Employees may become more concerned with meeting specific targets to receive favourable reviews rather than exploring innovative ideas or solutions. This focus on conforming to set standards can significantly limit an organisation's creative potential.

Passive-Aggressive Controlling Attitudes

A major drawback of performance reviews is their potential to foster passive-aggressive behaviour. Managers might use these sessions to exert control over employees in subtle, indirect ways, often under the guise of constructive criticism. This can create a toxic workplace environment, where open, honest communication is replaced by underlying tension and unspoken grievances.

Inappropriate Lines Crossed About Someone’s Capability and Opportunities in Life

Performance reviews can inadvertently cross personal boundaries, making sweeping judgments about an individual's capabilities and prospects. This not only affects the self-esteem of employees but also puts undue pressure on them. The assumption that a manager or reviewer can accurately gauge someone’s entire professional potential in a few meetings a year is not only unrealistic but also very damaging.

Inadequate Knowledge of What Drives Self by Reviewer

A significant flaw in the performance review process is the assumption that the reviewer fully understands what motivates and drives themselves let alone the employee. Each individual is unique, with different aspirations, fears, and drivers. A standardized review process cannot capture this complexity, leading to feedback that might be irrelevant or even demoralizing for the employee.

Reliance on Receiving Top-Ups of Self-Worth

For many employees, performance reviews become a source of validation, a way to measure their worth within the organization. This dependency is unhealthy, as it places too much emphasis on external validation rather than internal self-assessment and growth. It can create a cycle where the employee's self-esteem and confidence are heavily tied to their review outcomes.

Short-Term Performance Goals Inhibit Creative Flow

Lastly, the focus on short-term goals, often a key component of performance reviews, can inhibit long-term creative thinking. Employees become preoccupied with meeting immediate targets to ensure favourable reviews, neglecting broader, more innovative projects that could benefit the company in the long run. This emphasis on the short term can impede the development of ground-breaking ideas and strategies.

Conclusion

The traditional performance review model is a double-edged sword. While it aims to evaluate and improve employee performance, it often ends up causing stress, stifling creativity, and creating a toxic work environment. Companies must wake up to these pitfalls and consider alternative methods of employee assessment and feedback. Instead, create cultures where feedback is continuous, constructive, and not tied to anxiety-inducing, formalised reviews. The future of work demands a more holistic, empathetic approach to managing and nurturing talent.