Should companies eliminate the traditional employee evaluation process? Featured

9:01pm EDT August 31, 2011
Should companies eliminate the traditional employee evaluation process?

Over the course of the last century, managers and supervisors have been given the arduous task by HR departments to complete those ever-annoying documents called performance reviews. Employees dread them, managers hate them, and HR departments (made up of the people who administer the process) tend to loathe them. So if this seemingly universal dislike surrounds these reviews and processes, why do businesses feel compelled to continue using them year after year?

To learn more about these HR tools, Smart Business spoke with Brad Bjelke, an attorney with Jackson DeMarco Tidus Peckenpaugh who ran an HR department for more than five years and who has counseled small and large companies on HR legal matters.

How did the performance review process start?

Performance evaluations, in some form or another, have been used ubiquitously by businesses for a long time. Attorneys often counsel HR professionals on the need for good documentation, especially as it relates to employee issues, poor job performance, etc. Without that documentation, companies have a difficult time defending their positions in litigation. Over the years, this ‘need’ for documentation has morphed its way into performance reviews, since they are generally the only formal documents generated for an employee in any given year.

What is the general feeling by management toward the performance review process?

For the most part, managers dislike the entire review process. HR departments struggle to keep evaluations completed on time, and management tends to put off these tasks as long as possible. What I learned over the years was that this ‘procrastination’ was not a result of having to fill out the forms; rather it was the fear of having to meet with the employee and be ‘honest’ with that employee. Through experience, managers have realized that once they criticize one of their team members, the employee morale tends to sink and the employee generally becomes unproductive (looking for a new job). If the manager’s team starts to become unproductive, then the manager will look bad to his/her executives. As a result, I found that many managers would rather just give a positive evaluation (even if it is not deserved) rather than have to deal with the issues that arise from a negative review.

What do employees really want?

Most employees dread performance evaluations. First, it is not in a person’s nature to enjoy being criticized (even if it is the so-called ‘constructive criticism’). However, it is natural for any person (even a poor performer) to believe he or she is doing a great job. This is validated when employers use self-evaluations; most employees score themselves very high and very differently than the scores given by their managers. All in all, most employees only care about one thing during the entire evaluation process: whether or not they are going to get a pay raise. All of the emotion, the fear, the anticipation, etc., all center around the answer to that question, and once that question is answered, the employee tends to tune out anything else the manager says.

When companies realize the performance review process system isn’t working, how do they generally change it?

Most companies, when looking at the entire process, fail to change the performance review for the better. Instead, companies re-design the evaluation forms, draft new job responsibilities to be graded, or change the implementation process for the evaluation. The problem with these types of changes is that they make things fresh and new for the HR department, but fail to address the underlying problems of performance reviews or identify the real goals of having them.

What legal landmines should companies watch out for in performance reviews?

It is still sound legal advice for companies to document all employee problems and issues and maintain these records. However, because performance reviews often contain inflated grades or lack of information due to fear of upsetting the employee, attorneys are often faced with a certain set of facts coming from the company in an interview that can sometimes be the direct opposite of statements on the written performance evaluations. Companies must work hard to avoid these types of inconsistencies.

Is there a real alternative to the performance review?

Many companies I have worked with have implemented a policy whereby managers and supervisors meet with their employees on a regular basis (monthly/bi-monthly/quarterly). During these meetings, there is an interactive discussion between the employee and the manager, and because of the regularity of the meetings, there is less pressure on the manager to hold back true criticism and less worry with the employee because it is not that ‘one big meeting’ each year. Having these meetings regularly and subsequently documenting the details of the meetings allow the manager to stay on top of the employee’s progress and to be a part of fixing the issues, if any arise.

While no perfect situation exists for reviewing an employee’s performance, it is very important for companies to understand the dynamics of their employees. Generation Y expects a different work environment than Generation X, and it is up to companies to stay creative and keep the work force productive. Consulting with an employment attorney on a regular basis will help companies and their executives understand the legal ramifications of the procedures they are using for reviews and help facilitate new ways of doing business.

Brad Bjelke is senior counsel with Jackson DeMarco Tidus Peckenpaugh. Reach him at (805) 418-1927 or bbjelke@jdtplaw.com.