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Can Employers Just Stop Doing Performance Reviews?

Posted by: on February 21, 2018 in employee relations Human Resources


Performance reviews are an oft-dreaded obligation for employers and employees alike, but are still regarded as a necessary part of managing employee development and productivity. However, with the introduction of new technologies and the shift in lifestyle habits of today’s workforce, performance reviews may be becoming an obsolete management technique. Many businesses are already reevaluating this traditional form of employee management and instead opting for more meaningful approaches to providing feedback to employees.

According to “The Performance Management Revolution,” organizations are changing the way they view the performance management process because of several factors. For one, the traditional review process is an investment of man-hours that doesn’t fit into most business models anymore, often taking time away from more important tasks and creating piles of paperwork that serve no real purpose. Additionally, many employers are finally acknowledging that both supervisors and employees despise the entire review process - an observation that is only made more apparent with the emergence of a newer, younger workforce.

This doesn’t mean that these businesses don’t feel the need to provide feedback or understand the value of doing so, it just means that they’re simply recognizing that a more forward-oriented and frequent approach, particularly in a rapidly changing business landscape, holds more potential value. Rather than holding formal, yearly conversations, more companies are focusing on cultures that demand more constant and real-time interactions and feedback, catching employees “in the moment,” rather than documenting thoughts throughout the year and sharing them during an annual procedure.

However new and inventive these approaches may be, they aren’t without their own drawbacks. The authors of “The Performance Management Revolution” point out four in particular:
  • Challenges aligning individual and company goals. When organizations move to a more project-based focus, it does help to ensure agility and the ability to flex to meet changing market needs, however, the alignment between corporate and individual goals can get murky.
  • Rewarding performance. Moving away from an emphasis on the financial rewards and punishments that come with an end-of-year review structure can leave employers struggling to find an alternative to the pay-for-performance approach.
  • Identifying poor performers. Some managers are hesitant to “call out” poor performers, even during an annual review. Using a less formal approach to performance management is unlikely to change this trend, and could even make it more difficult for managers to feel comfortable identifying poor performers.
  • Avoiding legal troubles. Some employers express concern that without the paper trail of discipline that comes with performance reviews, it may open them up to an increase in discrimination charges.
Some of these drawbacks can simply be addressed by small changes in policies. Additionally, in an at-will state such as California, employers don’t necessarily need to follow a more progressive discipline policy that involves verbal or written warnings prior to discipline or termination. Regardless, it’s important to consult with an HR Representative before making any changes to a company’s policies and procedures.

Emplicity understands that HR Outsourcing should be simple and meaningful. As a Professional Employer Organization (PEO), we strive to be a great partner in supporting your business. If you would like to request more information on how we can assist your needs, please reach out to us at 877-476-2339. We are located in California – Orange County, Los Angeles, and the greater Sacramento and San Francisco area.

NOTICE: Emplicity provides HR advice and recommendations. Information provided by Emplicity is not intended as a substitute for employment law counsel. At no time will Emplicity have the authority or right to make decisions on behalf of their clients.