By October 22, 2008 12 Comments Read More →

Professor Channels Dr. Deming and Writes "Get Rid of the Annual Review"

Get Rid of the Performance Review! – WSJ.com ($$)

A UCLA professor, Samuel A. Culbert, has written a monumental commentary in the Wall Street Journal. The subheadline says it all succinctly,with “It” being the annual performance review….

It destroys morale, kills teamwork and hurts the bottom line.

And that’s just for starters.Dr. Deming always wrote that the annual performance review was harmful. In this article, he is quoted as writing the following:

  • Appraisals and merit reviews prevent workers from having pride of workmanship. We suppose that the use of the annual merit review gets the best from workers. As Dr. Deming says, “The result is precisely the opposite. You get the worst out of people. You don’t get what you pay for.”
  • Appraisals create fear, reduce cooperation between workers (and managers), and focus on visible results only. Frequently managers use appraisals as a salary administration tool. They use them to reward and punish. Appraisals are subjective. They commonly do not reflect the actual performance or potential of the appraised person. Appraisals are a lie.

Deming used to say “substitute leadership.” Professor Culbert (my new hero) lays out some alternative approaches, but not before thoroughly trashing the practice of the annual review. Be sure to read the actual article (twice, even), but here are some highlights. Culbert actually calls the annual review “immoral”:

I believe it’s immoral to maintain the facade that annual pay and performance reviews lead to corporate improvement, when it’s clear they lead to more bogus activities than valid ones. Instead of energizing individuals, they are dispiriting and create cynicism. Instead of stimulating corporate effectiveness, they lead to just-in-case and cover-your-behind activities that reduce the amount of time that could be put to productive use. Instead of promoting directness, honesty and candor, they stimulate inauthentic conversations in which people cast self-interested pursuits as essential company activities.

Culbert’s piece has many sections that spell out the dysfunctions in annual reviews, including:

  • They harm teamwork
  • The “objective” nature is completely fake objectivity
  • They create adversarial relationships between employee and manager
  • Pay for “performance” is really market-driven pay (or raises) in disguise
  • They impede personal development

Culbert spells out “substitute leadership” in some specific terms. The manager’s job is to coach the employee to performance throughout the year, not just point fingers and grade after the fact. Culbert writes:

The boss’s assignment is to guide, coach, tutor, provide oversight and generally do whatever is required to assist a subordinate to perform successfully. That’s why I claim that the boss-direct report team should be held jointly accountable for the quality of work the subordinate performs. I’m sick and tired of hearing about subordinates who fail and get fired, while bosses, whose job it was to ensure subordinate effectiveness, get promoted and receive raises in pay.

I, for one, will never conduct traditional annual reviews if I have my own company. I guess I should tread lightly as the employee of a company that DOES follow this practice. But can you blame them? It’s par for the course in the corporate world.

What are your experiences with annual reviews? Have you been part of an effort to abolish them or do them in a productive way, as Culbert pleads for? Does anyone have perspectives on what Toyota does, considering the influence Dr. Deming had on them?

Listen to my podcast (2011) with Dr. Culbert.


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Mark Graban's passion is creating a better, safer, more cost effective healthcare system for patients and better workplaces for all. Mark is a consultant, author, and speaker in the "Lean healthcare" methodology. He is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. His most recent project is an eBook titled Practicing Lean that benefits the Louise H. Batz Patient Safety Foundation, where Mark is a board member. Mark is also the VP of Improvement & Innovation Services for the technology company KaiNexus.

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12 Comments on "Professor Channels Dr. Deming and Writes "Get Rid of the Annual Review""

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  1. glanger says:

    Amazing, finally somebody has been successful articulated exactly how I feel and what I want to say after every performance review that I have ever experienced. I am sure many of us have experienced this inexplicable sense of anguish, desperation and “I am not good enough” that follow the days after a performance review. It doesn’t matter how many positive and how many “great”, “excels in”, and “could not do without you” comments you get. We always focus on that one “needs improvement” or “could do better” comment that is probably in there, as Prof. Culbert points out, to justify the pay increase (or not) that has nothing to do with your performance.

    I have had this blog post bottled up so long that just finally writing it feels good. Thank you for the inspiration Dr. Culbert, I am now officially a fan!

  2. Jenny says:

    I completely agree that the annual review is normally pretty awful for all involved. So many managers hate even doing them, that how could an employee come out of it unscathed if the person performing the review resents all the time required to do it? What I would like to hear are some really good examples of an alternative to the annual review (my first review, at the 6 month mark, is approaching in November).

  3. Anonymous says:

    I looked forward to performance reviews as an athlete in the company, and now as a manager, the same.

    As an athlete, I was able to present data on my production during the year, and hear constructive feedback. Subjective or not, it si a perception, and if I am going to be the best I can be, I produce data driven and “data-backable” results while at the same time addressing the human side of employment, perception, be it right or wrong.

    As a manager, I get an opportunity to allow my reports to set goals for themselves, present their work results in tangible forms, and set goals for them going in to the future.

    Seeing the negative just seems like to much work to me. In my experience, the best workers go out of a review having presented their case, and being fully ready to work on the constructive feedback. Folks who see any type of reasonable constructive feedback as an opportunity for resentment need to be put in a position that will allow them to evidence the resentment, so that it may be addressed.

  4. Anonymous says:

    Anon, what do you mean by you’re an “athlete” in the company?? I think you’re in the minority in looking forward to reviews. How much time do you spend gathering data and creating a positive perception of your performance instead of focusing on value added work and customer needs? It seems like all of the batched up annual review prep (on both sides of the manager/employee relationship) is either “muda” or it’s waste in that it’s only done in one huge batch instead of a continuous feedback throughout the year.

  5. Anonymous says:

    When I was what I can an “athlete”, I was a purchasing agent.

    My performace could be easily recorded, daily, by occurence or by project completion(once the tools and system were set up). Examples are (were) the number of part shortages my department experienced, the amount of positive purchase price variance vs. negative variance I realized, reduction in poor quality materials, COQ realized in supplier improvement projects, and the like.

    Honestly, it doesn’t take much time at all. If a project or activity can’t have measurable results, then it shouldn’t be done. If it does have measurable results, then I go in knowing the score to begin with, and my goal. Comparing, contrasting, and recording progress tells me if my actions are the right ones, and in the end have demonstratable gain.

    Not hard. For me, it is a matter of keeping up with it.

    Agree about the continous feedback. Unfortunately, continous feedback requires more managerial courage than annual reviews, because it is stigmatized as micro-managing. Changing cultures into one that encourage employees to create and presaent data to show their worth, and that make employees (and managers) open to continous feedabck loops is the way to go, but difficult in several different respects.

  6. Neutron Jerk says:

    To the purchasing guy — I think it’s rare when any one person’s job is *that* isolated that their performance is solely based on their own work.

    What if a purchasing guy is impacted by a huge upswing in sales that wasn’t forecasted? If you have to rush a bunch of parts in, you might have to pay more and that hurts your cost measures, even though it’s not your fault, right?

    No individual is an island in an organization. Why do we measure people that way??

    Another issue I’ll bring up on annual reviews (that I’m surprised the prof didn’t bring up) is forced distributions. On a 1 to 10 scale “you get a 7… you should feel good, nobody ever gets a 9 or a 10.” Those bullshit games are designed to do what? Keep people feeling bad so they don’t dare go test the open job market?

  7. Anonymous says:

    All data has influences. Knowing what those were/are help me be successful.

    Recovery plan during huge upswing?
    Root cause of huge upswing? Corrective action?

    My data may look bad, but an action plan is in place and another reason to look forward to more challenges.

    I won’t work somewhere I don’t like. The numbering scheme is BS, and I’ve gotten those lines too, but why choose to hear the bad whent here is so much good? I’ve always been confused by people who take that path.

  8. Mark Graban says:

    glanger had a nice blog post on this here:

    LINK

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