There was a time when Human Resource professionals would focus on performance reviews to point out the areas that staff needed to improve. These reports were designed to give guidance to staff on areas to improve over a period of time. The lower the score, the more improvement needed.
Human Resources Management magazine did a study that explored the effectiveness of performance listed numerically on reports. 23% felt that the company was average in the way they handled their performance reviews. Furthermore, managers who were using this approach were polled and 95% stated this caused more disdain in the company and 90% of the HR Heads believed this type of reporting doesn’t offer accurate information. In many cases, it was stressed that the majority of staff would become counterproductive in low scored areas. So these reports caused more damage than good to the performance in the company. Often it resulted in high staff turnover which meant companies would have to turn to their permanent recruitment agency more than they budgeted for.
Why does a numerical ranking system deliver such negative results? For one, you’re pointing out the fact you’ve spotted problems with the employees performance. This causes the fight or flight response to go into effect and employees make rash decisions, because it is misinterpreted. Most don’t see it as a way to show them how to improve their performance, rather to pinpoint their problems. Instead, many seek out their local recruitment agency to find them an alternative employment solution.
Disengagement is also a possibility. Some reviews consist of a three point system. A 1 means improvement is needed, 2 is meeting expectations, and a 3 means that expectations are exceeded. While theoretically, there is nothing wrong with a 2, it causes the employee to become disengaged, because even if they are feeling like they’ve given their all, their supervisor is suggesting more can be done.
There are other viewpoints on the ranking system that suggest other problems it contains. This includes:
- Numerical labeling dehumanizes and demoralizes subordinates and places them in a lower status in the company.
- Human resources department often create confusing and misrepresenting performance reviews with numbers that provide nothing of value to the employee they are intended to motivate.
- Poor grades don’t lead to people in the workplace to decide on a path to improvement, because no clear option is available. That means that the individual can become demotivated, disgruntled, and disengaged at work.
- When employees become pitted against each other in a numerical system, they will begin to undermine each other in order to place higher in ranking.
While performance reviews may have their place and a degree of value in your company, you do need to be sensible with your approach using them. Find a way to provide feedback that focuses on the strength of your direct reports and help to strengthen those areas, rather than point on everything they are doing wrong, or ranking and rating them numerically. You’ll find a positive statement goes further than a simple number.
For assistance in finding staff with strengths in the right areas, please click here.