A startlingly low percentage of employees, managers, and even CEOs find value in their organizations’ performance appraisal systems.
The dislike is so pervasive that a Leadership IQ study found 88% of managers and employees believe these types of appraisals tarnish their view of HR.
This damning statistic does, I feel – reveal a deep-seated issue with the conventional approach to performance reviews.
When employees were probed about the integrity, openness, and meaningfulness of their performance appraisals, a mere 17% gave a nod of approval.
This sentiment lays bare an uncomfortable truth for HR: the performance appraisal, as it stands, is not only an unwelcome exercise, but it is undervalued by the very people it seeks to serve.
But how?
Let’s take a look at the two key reasons why people hate performance reviews:
Problem #1:
Lack of differentiation between performers
An overwhelming consensus among employees, managers, and CEOs (96%, to be exact), believe appraisals should clearly distinguish between high and low performers.
Yet, only 22% feel this differentiation actually happens.
This discrepancy highlights a fundamental flaw in the appraisal process: if it fails to identify and differentiate performance levels accurately, its very purpose is nullified.
One study found that in 42% of companies, high performers were actually less engaged than low performers.
Put another way, the employees bringing you the least value are often more engaged than the folks who reliably deliver good and great performance.
Think about what life is like for some of your star employees.
They’re the ones who, with a smile and a great attitude, work weekends and late nights, going above and beyond to ensure everything gets done correctly.
Then, after a year of performing better than everyone else, they get a performance review that’s virtually indistinguishable from the rest of the team.
Adding insult to injury, they see that a few folks with notoriously bad attitudes receive top scores just because they’ve got adequate technical skills.
A lack of differentiation may not damage the morale of your low performers, but your stars will only tolerate it for so long before they start glancing around for an exit.
Problem #2:
Insufficient Relevant and Positive Feedback
Adding to the litany of grievances is the lack of relevant, constructive feedback during appraisals.
Only 14% of employees feel that the feedback they receive is pertinent and valuable. This statistic is alarming, considering 95% of employees yearn for feedback that references specific instances and acknowledges their accomplishments throughout the year.
Recognition – or the lack thereof – is another critical pain point.
A mere 28% believe their efforts and achievements are duly acknowledged.
Conversely, more than half of the workforce feels neglected, with their contributions unrecognized, fostering a sense of undervaluation and invisibility.
Part of this problem stems from the cumbersome nature of most performance reviews.
Managers often feel crushed by the workload of filling out dozens of review forms, leading them to seek any available shortcuts.
A decade ago, managers would buy books offering thousands of stock phrases for performance appraisals. Generic expressions like “BLANK is a team player who works collaboratively to assist their colleagues” and “BLANK is a self-motivated professional who completes all of their projects on schedule” are still littered throughout performance reviews.
These days, AI tools like ChatGPT can write thousand-word performance reviews with little prompting.
It’s frightening how many performance reviews you can read that offer little or no specifics about the individual employee, opting instead for a litany of genericized cliches.
The performance review’s failure to provide targeted, affirmative feedback and to distinguish between performer tiers saps its effectiveness and credibility.
Instead of being a useful exercise, the ritual becomes a dreaded, futile one – devoid of genuine evaluation or encouragement.
The path forward is clear: revamp the performance review process to ensure it differentiates effectively between performers and offers detailed, positive feedback.
By addressing these two issues, HR can start transforming the appraisal process from a bureaucratic formality into a constructive and even appreciated exercise.