Is the traditional performance review process worthwhile?
According to Mercer’s 2013 Global Performance Management
Survey, only three per cent of organizations say their perfor-mance
management system delivers exceptional value, while 48
per cent say their overall approach to performance management
needs work. Some companies are scrapping the process altogether.
How did such a valuable tool become so questionable?
It helps to remember how we got here.
TIME, MOTION AND RESULTS
Managers were not subjected to formal performance reviews un-til
the mid-1950s, when Peter Drucker introduced the concept of
“management by objectives.” Therefore, the first phase of modern
performance management was based on setting objectives. It was
a top-down assessment activity, suitable for hierarchical organiza-tions,
and directly affected salary and employment. Feedback was
based on hitting numbers. Employers began tracking results and
monitoring those who contributed to results. Performance rating
scales were also put into place.
By the late 1960s, guidelines for a more fair and objective selection
process came into effect. This impacted the performance appraisal,
and the era of formalization and standardization began.
The foundation for the review was the prior year of employ-ment.
Skills to be developed were based on the requirements of
the job itself, and assessed by how the employee performed the
Soon companies began to build more strategic performance
management systems using the appraisal to develop skills need-ed
to achieve the coming year’s objectives. In this way, individual
objectives were linked to the business strategy, which was opera-tionalized
by the business unit or department. Employees began
to get a clearer understanding of how they contributed to over-all
Fairness and objectivity was still at issue in those sensitive times,
and the status quo became the standard for reviews, so managers
ended up comparing direct reports rather than focusing on the in-dividual.
Development remained focused on skills and knowledge,
IS IT TIME TO CHANGE THE TUNE?
By Dr. David S. Cohen
HRPATODAY.CA ❚ NOVEMBER/DECEMBER 2014 ❚ 37