Powerful Failure of Performance Reviews

By Tom Epperson August 27th, 2013
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I have spent much my career helping managers manage their employees—I’ve helped them write objectives, set goals, and conduct meaningful reviews that motivate, inspire, and set standards for employees. I’ve helped them rate their people and give merit based raises.

All in all, I have failed miserably.  I haven’t failed just a little bit; I have failed in massively wasteful ways. And not because I’m bad at teaching managers (I hope), but because performance management systems have not evolved to match the challenge of modern organizations.

On paper, performance reviews are awesome. Set achievable but challenging goals? Check. Provide clarity while aligning effort? Check. Provide a system for rewarding high performers while holding low performers accountable? Check.

The reality is that performance reviews are one of the most reviled processes in modern organizations. They waste time and resources, they demotivate more often than they motivate or provide clarity, and they rarely result in merit pay that encourages high performance. Employees hate them. Managers hate them. I have yet to meet a person who says “I can’t wait to complete my performance evaluation!  It’s like my birthday, falling in love, and winning the lottery all rolled into one!”

Performance Management was developed in a time of machine-like bureaucracies as a method of controlling human resources. (Management is right there in the title.) Yet modern organizations do not look like their predecessors: they are flatter, they are organized more like networks than like pyramids, and they move a heck of a lot faster than their predecessors ever did.

Without a doubt, it will take smarter HR pros then myself to design systems that can flex and adapt to the challenges of modern organizations. Managing is still important, despite what many gurus will tell you. The one thing I do know is most of what is missing in the performance management cycle is leadership.

What provides the real value of performance reviews? The objectives? The forms? The process? The bureaucracy?

Or is it the transparent, below-the-waterline conversation about what really matters? The honest feedback? The focus on achievable outcomes? The belief that the person can and will succeed with the right amount of direction and support?  The relationship between two human beings that has an immeasurable impact on both?

We get so hung up on our forms and our processes and the fact we have to churn out thirty evaluations with a tiny budget for raises that we forget the intent. The intent is to unlock our human capital, to ignite the potential of individuals and organizations.  And the best way to achieve that goal is through leadership.  Performance management can be saved, but doing so requires more leadership and less bureaucracy.


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Tom Epperson


Tom works for Luck Companies, an organization dedicated to igniting human potential through Values Based Leadership. Tom has supported the organization in a variety of ways over the years, including his role as one of the architects of Luck Companies’ cultural transformation. Tom has experience in coaching, facilitation, organizational development, and human resources; he currently supports Luck Companies’ efforts to develop Values Based Leaders both inside and outside the company. Tom is a certified business coach and is working on a Doctorate in Leadership at The George Washington University. Tom is married with two children and lives in Richmond, Virginia. @ThomasDEpperson

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