A friend of mine recently told me she'd just received the best performance review she's ever had. It was a shame, she said, since she wouldn't receive a correspondingly positive raise. Her employer, like many others, froze salary increases in response to the recession. (Some companies took it even further and cut salaries.)
I wasn't surprised. As those on both ends of performance reviews know, the boss must find the right balance of positive and negative to justify the predetermined raise. Since her boss didn't have to wedge my friend's performance into a narrow and already determined slot, he apparently flagged fewer areas for improvement and offered what she felt was a more honest evaluation. Many of us have improved a desired metric but not seen a larger salary gain because -- surprise -- a different area was found wanting in the next review.
But this is not the biggest problem with performance reviews. As Jeffrey Pfeffer, a professor of Organizational Behavior at Stanford University's Graduate School of Business, wrote in BusinessWeek, they just aren't very objective. For instance, managers consistently give better reviews to employees they've hired vs. those they've inherited from other managers. Also:
The biggest issue that Watermark Consulting founder John Picoult has with performance reviews is an over-reliance on employee self-evaluations. Writing in Forbes, he says many managers lean too heavily on self-assessments rather than providing constructive feedback. This is particularly problematic considering that Cornell researchers found that poor performers tend to see their efforts through rose-colored glasses while top performers are often needlessly hard on themselves.
So, how can you improve performance reviews? Some suggestions from Pfeffer, Picoult and employers like Procter & Gamble: