By Chris Wright, Ph.D.

I don’t know any HR professional that enjoys administering performance evaluations for their organization.   It seems that no matter how hard an organization works to make the performance evaluation process fair, accurate and effective, most employees are going to feel the process IS NOT fair, accurate or effective.

I recently presented annual engagement survey results to a client that had invested a great deal of time and energy into revamping its performance management system.  To their dismay, employees disliked the new process as much as the old process.     Developing a performance management process that is viewed as fair and effective by all is very difficult, if not impossible.   There will always be employees who feel that they are performing well, even if they are not.   There will always be some degree of bias (cultural, gender, age) in the performance review process, as long as human beings are involved in the process.

The best performance management processes I have helped implement utilize both annual goal-setting and behavioral ratings tied to critical organizational competencies.  The annual reviews are accompanied by periodic (i.e. monthly, quarterly) check-in reviews.   I would also recommend conducting both self and supervisor reviews as this leads to a more meaningful performance discussion between a supervisor and subordinate and helps identify if there are discrepancies in how each views the subordinate’s performance.   Companies also should invest heavily in training managers how to evaluate performance fairly and deliver effective performance feedback.

Based on my experience, I have found the following to be the most common reasons why employee performance evaluations fail.  If your organization can avoid these common mistakes, it will be more likely to have a process that works and is perceived as fair and effective.

The 10 Most Common Reasons Why Performance Evaluations Fail:

1) Performance evaluations are a safety valve for a poor selection process.

2) Performance evaluations are not conducted regularly and consistently.

3) Performance evaluations are only used when negative feedback must be given or the organization wants to document behavior to prepare for a termination.

4) There is inconsistency in how managers rate their employees.  One manager might rate an employee a “7” because he/she doesn’t believe anyone deserves a “10” while another manager rates an employee higher than he/she deserves hoping this might boost the employee’s confidence and subsequently his/her performance. (If performance ratings are directly tied to salary, this many times creates tension, conflict and low morale.)

5) The supervisor hasn’t been trained to give feedback appropriately.  A huge challenge in any organization is teaching managers how to give constructive feedback.  Many managers are afraid to give feedback that may be viewed as negative and will typically avoid it.

6) Annual reviews are used to justify salary freezes or lower than anticipated raises.   Lower scores are given across the board, this can be particularly de-motivating.  This is a tactic we’ve seen an increase in given the downturn in the economy.

7) The criterion for performance is not well defined and weighted based on importance to the organization’s success. Attendance and positive attitude gets the same weight as the quality and quantity of work. So the employee who shows up every day on time with a smile on his/her face gets an equal or higher rating than the individual who is occasionally late but exceeds all productivity goals.

8) The organization tries to combine the performance review with a career development discussion.

9) Managers are encouraged to rate high performers with lower scores resulting in a system that doesn’t distinguish high from average performers.  High performers get discouraged and leave.

10) Companies invest heavily in performance management technology, but give little thought to defining the performance criteria and competencies that are critical to the organization’s success.

Dr. Wright is the founder, President and CEO of Reliant (www.reliantlive.com). He led the development of Reliant’s end-to-end Talent Management solutions and assessments. Over 1000 companies globally utilize one of Reliant’s talent management solutions.