On the Job by Anita Bruzzese Why Top Companies are Killling the Traditional Performance Review

On the Job by Anita Bruzzese Why Top Companies are Killling the Traditional Performance Review Hear that whooshing sound? Thats the collective sigh of relief from Microsoft employees who wont be subjected anymore to the companys despised stack rankings. Under that system, employees were essentially forced to compete against one another to receive excellentperformance rankings. The rankings were supposed to cull the weakest from the herd, but instead it led to employees feeling helpless and somehow encouraged to backstab colleagues to get a better ranking. Its estimated that at least 30% of Fortune 500 companies use such rankings that rate employees along a curve. For example, an employer might state that a manager can only put 10% of employees in a top category, while 2% must be in the bottom group. But Microsoft was often criticized for using the yank and rank process made popular at General Electric in the 1980s. Motorola CEO Greg Brown has referred to its ranking system that iteventually tossed as demoralizing and creating a culture of infighting. But Samuel A. Culbert has argued for years against that evenannual performance reviewsare horrible, calling them one of the most insidious, most damaging and yet most ubiquitous of corporate practices. Everybody does it, and almost everyone whos evaluated hates it. Its a pretentious, bogus practice that produces absolutely nothing that any thinking executive should call a corporate plus, Culbert says. Culbert, a professor at the UCLA Anderson School of Management, argues that companies should instead use what he calls performance previews. Under that scenario, an employee outlines what kind of supervision helps him or her operate most effectively and what kinds of past management practices cause a problem ingetting work done. The manager then shares with the worker what is needed for the manager to be most effective. Ongoing discussions about how to best combine their talents would then help them communicate better anddeliver better resultstogether, he argues, and puts an end to performance reviews that he says are nothing more than intimidation. Employers are clearly re-thinking performance management, but what will evolve is under debate. Will all companies eventually abandon rankings? Will the annual performance review be scrapped as well? While experts debate the merits of how best to manage their employees to achieve results, here are what some other employers are trying: Motorola.The company scrapped its employee rating system because CEO Brown worried about how employees might feel being called a valued performer rather than excellent or outstanding, he toldCrains Chicago Business.Managers and employees now have ongoing communications about performance in addition to the annual reviews that ensure employees met their goals. Pay discussions are (read more here)