The Risk of Reviews

We’re in the 4th quarter of most companies’ fiscal year, to managers up and down the chain are thinking about doing or getting performance reviews.

The Wall Street Journal had a useful article on this topic a few days ago, and we’ve blogged about it before, so we think it’s useful to recap some of the trends:

1. Most companies give performance reviews once a year, about this time. The single review can lead to real employee anxiety, which isn’t a good thing. We would agree with that assessment, and would recommend doing them quarterly, at least in large companies. When promotions are handed out, particularly into new departments, they’re benchmarking performance that can be ranked.

2, Some major US firms such as Microsoft, Lilly, Cigna and GE have actually pulled even yearly rankings. The reason is apparently that 90% of the workers got a rating they thought they didn’t deserve, resulting in a 23% drop in engagement. Fair enough, but what happens at promotion time?

3. Microsoft, to its credit, has replaced it’s review system with frequent ‘conversations’ about performance among managers and subordinates. We think this is a good policy and apparently results in better morale and engagement. Now if they could do something in the operation of the Hotmail renewal office, to make it more customer friendly, that would be something.

4. We think among our small business clients, most practice a yearly review, based on the conversations, or do nothing at all, because it’s more paperwork, preferring to note any conversations or disciplinary actions in written form in the employee’s file.

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