Do Annual Performance Evaluations Really Help an Employee?

I have been wrestling with performance evaluations for years. They have changed very little. No matter if a company is small or large; evaluations follow the same arcane formula. Sometimes they are tied into annual salary increases, so the better your evaluation, the bigger the raise the following year.

Is this a model that really benefits an employee as much companies tout? Or, is it a clever way to control expense under the guise of “performance pay.” There are some things to think about.

Here is the typical scenario. It is the end of the fiscal year and HR is hounding managers to turn in performance evaluations by a certain date. Managers often do not schedule adequate time to perform the reviews with their employees. They become somewhat like a mechanical exercise fraught with incomplete information and errors.

For some managers, it is a time when they feel empowered to dump on an employee. After an entire year of no feedback, the employee learns that his performance has been less than acceptable. Even though the employee thought he was doing above average, the manager spews out isolated examples of less than perfect performance.

The result: the employee leaves the evaluation angry, frustrated and shocked. They have every right to be angry, even if the manager’s assessment of their performance was accurate. The manager failed in his responsibility to constantly communicate throughout the year, leaving no surprises for the end of the year.

If a manager does not spend enough time with each evaluation, the result is always less than optimal. This assumes you can have an optimal experience being evaluated using the typical “situation, action, result” model. Using this model, the manager needs to give examples supporting the rating they assigned to each of the key job responsibilities. These examples should describe a situation that supports the rating, the action the employee took to address the situation, and the result.

Some evaluation systems allow the employee to perform their own evaluation first. In this scenario, the manager must take input from the employee and incorporate it into his own evaluation of the employee’s performance. This requires some negotiation between employee and manager. How many employees are that self-aware? Many times, the manager takes the self-evaluation and hacks away at it until it is unrecognizable.

There is also the problem of objectivity versus subjectivity. I have seen more evaluations that are subjective, rather than objective. It takes considerably more time to be objective. You need empirical data. That data must be collected throughout the year. Most managers say they are too busy.

So, if we are too busy to spend the time necessary to give an employee a fair and objective performance evaluation, should we be doing them at all?

For HR, a final score can be used to determine the percentage increase in salary for the next year. They also have a document that can be filed and used in any legal disputes. HR likes documentation.

Is there really value for the employee? What have you experienced?