The Greatest Myths of Annual Appraisals (Part 1)

This is the first installment in a three-part series debunking common conventions about performance reviews.

I’ll come clean: I originally fell for these myths as an HR director. I’m not going to pretend I had all the answers then, and it certainly took until quite recently for me to see through them. But since then I’ve done my research and now feel completely confident I can bust each myth in turn.

Myth: Annual Objectives Provide Clarity and a Focus for Ambition

There are a number of reasons why this isn’t so. The first is that most companies tend to lumber people with too many different types of objectives.

A Never-Ending List

A single person can end up with a harvest of her own objectives, her broader team objectives, her departmental objectives, and even her organizational objectives. While we’re at it, why not throw in a CSR objective, a diversity objective, and a health and safety objective or two?

One poor guy I spoke to at the BBC told me he had a whopping total of 85 objectives. Clearly this was an extreme case, but I could see how it had happened. He’d got his global BBC objectives, BBC News objectives, BBC Regional News objectives, local radio station objectives, a people objective, a safety objective, a finance objective — the list goes on. It’s utterly crazy.

The reason this happens is because managers see objectives as a mechanism for driving the changes they want. If the diversity team, for example, wants to meet a particular goal that year, they’ll ask for it to be tied into people’s objectives. Let’s add in a diversity objective! But the reality is if each employee has 20 or 30 objectives, adding in a diversity goal isn’t going to focus their minds on that area one bit.

The Bottom-Drawer Syndrome

There’s also the bottom-drawer syndrome: People forget about their objectives. Come annual appraisal time, how often do you take calls from a stream of managers and employees asking you if you’ve got a copy of their objectives from last year because they can’t find them?

We labor under the illusion that if somebody’s got an objective it’s going to be front of mind, but it’s not. This leads to another reason, which is that in a fast-moving world, the notion of setting an objective in April that’s still going to be relevant the following March is absurd. If the last year has taught us anything, it’s that we can’t possibly predict with any accuracy how the next 12 months will unfold. I don’t think I’ve ever looked at my objectives at the year-end and felt they were still key to my role. They need to change all the time to accommodate the fluid nature of our work and the changing world around us.

The Problem With Team Objectives

As well, we work in teams. Even the most sophisticated manager struggles to make the objectives he sets for his individuals greater than the sum of their parts. So team members end up with different sets of goals and therefore aren’t focused on delivering excellent work through the groups they’re in.

Part of the reason for the lack of team objectives is the way we’ve historically attached annual bonuses to their achievement. It’s hard to work out whether an individual person should receive a personal bonus when much of her work has been team-based.

“Want To” vs Have To”

Nor do objectives take into account human nature; it’s back to treating employees as objects instead of hu- man beings. Think about when you want to get fit. You don’t want to go to the gym, lose weight, and stop drink- ing because someone tells you to — you want to decide for yourself. It’s the same with objectives; a “want to”’ goal is always going to be easier to reach than a “have to” goal.

Bungling Bonuses

And finally, the attachment of bonuses to objectives is actually a driver of mediocrity rather than excellence; who wouldn’t want to negotiate down on their goals so they’re more achievable when their holiday abroad this year might depend on it?

I hope by now you’re joining me in questioning the purpose of this bureaucratic, time-rich, and costly exercise. Managing performance should improve productivity and motivation, but I don’t see the annual goal-setting process doing this.