Episode #117 is a conversation with Prof. Samuel A. Culbert of the UCLA Anderson School of Management.
Along with Daniel Pink, he is a fellow alum of Northwestern University. Prof. Culbert has a BS in Systems Engineering, the precursor of the Industrial Engineering department in which I was a student. Dr. Culbert then earned a PhD in clinical psychology from UCLA.
Today, we are talking about his most recent book, Get Rid of the Performance Review!: How Companies Can Stop Intimidating, Start Managing–and Focus on What Really Matters.
Much like Dan Pink's take on incentives in the workplace, Culbert is a contrarian about the generally accepted (yet dysfunctional) practice of the “annual performance review.” In his writing, Culbert calls them “corporate theatre,” as well as a “sham,” a “facade,” “immoral,” and “intimidating.” In the podcast, we talk about the problems and alternatives to this common management practice.
For a link to episode, refer people to www.leanblog.org/117.
Recent articles by Prof. Culbert via my blog posts:
- Professor Channels Dr. Deming and Writes “Get Rid of the Annual Review”
- New Book Gives Negative Review to Performance Reviews
Prof. Culbert mentioned that he only discovered the work of Dr. W. Edwards Deming a few years back, although they were both
Here is a WSJ video with Prof. Culbert:
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Mark Graban: I'm very pleased to be joined today by Samuel Culbert. He's a professor at the UCLA Anderson School in Management. We're going to be talking about his most recent book called Get Rid of the Performance Review: How Companies Can Stop Intimidating, Start Managing, and Focus on the Results of What Really Matter. Professor Culbert's previous book, Beyond Bullshit, revealed how bullshit became the etiquette of choice in corporate communications and showed how to develop the conditions required for straight talk. Smart Money Magazine named this book to its 2008 list of top ten reads, and it was honored as a finalist for the National Best Book Awards.
Dr. Culbert is the winner of a McKinsey Award for article published in the Harvard Business Review, and he's a frequent contributor in management journals and has authored numerous chapters in leading management-related books and has also authored really interesting op-ed pieces in both the Wall Street Journal and the New York Times in the past couple of years, both of which I've linked to on the page for this episode at LeanBlog.org/117. [music]
Mark: Sam, it's a real pleasure to have you joining us here today on the podcast.
Samuel A. Culbert: I'm looking forward to talking with you, Mark.
Mark: Before we talk about your book and some of the details, I was wondering if you could introduce yourself to the listeners on your academic background and other experience that you have.
Samuel: I have a bachelor's degree in systems engineering from Northwestern. I have a Ph.D in clinical psychology from UCLA. I have a post-doc two years working in organization development at the NTL Institute in Washington D.C. I've been teaching management for a long time. I consider the world of work my clinical laboratory. That's where I perform my action research, which means looking at topics that interfere with people being their best and talking with individuals that are stuck in these issues, and first, to understand their experience and then to muss them as co-investigators of me, talking about trying to figure out what about the protocols that they're following get in the way of them accomplishing the interpersonal and technical work that they need to accomplish and what might be done to make things go much better.
I go often to my intellectual cave and deconstruct the variables as we identify as part and parcel of the processes and formats that they're following to again analyze what's in the way and what needs to be done to fix the system so that they can work effectively the way they want to. I take a systems approach as much as I take a clinical approach, because I don't want to just fix things for one individual who's having a specific and categorical category, I want to make the system work for all people. Again, my over-arching goal is to help people be effective and be their best the way they can and maybe, in the process, teach people how to act like human beings in the workplace and make the world of work fit for human consumption, or more fit.
Mark: From reading your articles and a little bit in your book, I certainly agree with you that one of those things that gets in the way of people doing their best is the annual performance review, so I'm curious. First, if you can tell us how you came to deconstruct that or to discover that as a theme, and then tell us some of your thoughts on why that's such an important issue.
Samuel: I wrote my first published paper on the topic of performance reviews 30 years ago, published it in the now defunct Wharton Management School magazine. Performance reviews needs are so biased and they're presented as being objective.
Then more recently, I wrote a book on the topic of bullshit and straight talk at work. Thinking about how to publicize that book, I thought, “What's the biggest bullshit practice taking place in management today?” The idea of performance reviews just lept out of me because performance reviews are justified on many grounds but none of the grounds hold water when they're looked into more deeply.
Performance reviews, in my mind, are a dishonest, fraudulent practice carried out and justified on grounds I have no idea, never hold any water and they work against everybody. They make bad about the companies, to be exploited by bad managers because nobody wants to talk about the bad behavior of people who have the power and authority to control their careers.
It makes it difficult for good managers to be good because it makes it impossible for people to talk authentically and honestly about what's going wrong that they see or even their own limitations and difficulties and the additional resources they need in order to be competent. You've got a practice that is bogus at its roots because it pretends to be objective. It's not objective. It pretends to be the way the company sees you. If you get a different boss, you're going to be seen differently. They use metrics that have nothing to do with what people have in mind when they take action in the company.
People don't think along those lines that the same metrics make sense for any human being. People don't even define the metrics the same way. Is an individual a team player or a conflict avoider? What does it mean to be a team player? Well, it means one thing if you've got a boss who insists on loyalty and it means something else if you've got a different kind of boss, a boss who seems to have some kind of ability to talk straight and honest and can't because you're not going to speak up and possibly put your own promotion or your pay or just your basic employment at risk.
Anyway, I can't think of a more bizarre protocol that takes place in companies today and managers doing nothing to change their practices.
Mark: In your articles, some of the words I jotted down and I didn't hear you say yet, sham, façade, immoral, corporate theatre that's intimidating. Give us just one example for listeners, or maybe talk about things not being objective. I remember one company I worked for where the bosses would claim up and down all day long that because there was a number associated to each of us each year that somehow my boss used to use the word objective. With all due respect, he didn't understand the difference between objective and subjective. Could you explain, or do you see instances like that where people try to wrap you up in a neat score? Is that where people kind of fool themselves into thinking it's subjective? What's that dynamic all about?
Samuel: I don't know about you, Mark, but I live in a world full of self-interest. In order to give somebody a performance review you have to pretend that you have no subjectivity, that you're totally conscious of your own needs and inclinations, and that you have no other motive other than to be fair when, in fact, in order to believe that you've got to fool yourself. We've done the research and social scientists will tell you that people like the other people who are just like them. They like them the most. For some people first impressions are the lasting impressions. There's no such thing as objectivity when we're talking about people and their attributes and their ways of operating.
There's no such thing as objectivity when we're talking about people, and their attributes, and their ways of operating. There are things like objectivity. When there are countables being manufactured, then we know. But it's ridiculous just to pretend that somebody is objective in a subjective world. The world of work is even more bizarre than that, because we know that everyone pursues the self-beneficial, and has personal and subjective tastes, and situations from the past that haunt them, and that all we have are people who are imperfect and flawed, we have to pretend like what we're doing is primarily and exclusively good for the company. To go up front to talk about your subjective or self-interested beliefs is to get yourself discredited. It's too dangerous, so people pretend. People pursue the self-interested in an environment where they're constantly making choices about doing things in a way that's good for them, even choices that benefit the company. Because if you can play to your own strengths, you can do your best possible job for the company. To pretend that this is objectively the only right way to go, rather than the particular way I can be my most effective, then again, that's pretense. It's baloney. It's bullshit.
Mark: [laughs] Let me try to paraphrase back some of what I was reading in your articles. It sounds like you're making the case that performance reviews aren't just a matter of being unfair to employees, but it seems like you make the argument that they're just flat out bad for the company's performance.
Samuel: Terrible for the company.
Mark: Can you elaborate on that?
Samuel: First, as long as we have performance reviews, what's first and foremost in the employee's mind? Is it doing what's going to get him or her a higher score, or is it holding out to do what's best for the company?
Enter organization politics. The way to get a good performance review is to please your boss. What does my boss want? Bosses are just like employees. They have faults. They're flawed. They have difficulties, maybe even difficulties with an employee outshining them in the situation. Further screwing things up, is we're not even rating employees. We're relating people in relation to other people. We have to look for their faults, not their best suits, because pay is constrained, evaluations are constrained. The scale that Jack Welch introduced — and is just, I find, an abomination — of 20 percent excellent, 70 percent some form of average, 10 percent put on notice they have to be replaced. Do you like being called average? 70 to 80 percent of people in this format get to be called average.
Mark: I've never been a fan of the old “get rid of the bottom 10 percent” rule. I would agree. Part of what I've read you saying is that, instead of the boss being just a critic, that the manager should take on the role of coach. Instead of just judging successful/unsuccessful/average, that it's the manager's job, on an ongoing basis, to help everybody be successful.
Samuel: Absolutely. How the manager's job got to be grading people on personality attributes, instead of helping each and every employee bring in the results that the company needs, and doing whatever is necessary to get those results, and talk about what we need fixed, or changed, or what we've learned in the process, after the results are in, not after disappointing results are in, having to bank their criticisms and stand back while the employee screws up, so they'll have something to talk about during the performance review time.
Mark: One thing you write that was insightful is that — this came along the phrase of what you said was “corporate theater” — the performance review is more about creating the story that justifies why somebody gets a particular pay raise, which is, more than likely, just market driven. Is that reading you correctly?
Samuel: You're reading me very correctly. It's more corrupted even than what you've mentioned, because, in addition to that, it's not even what a guy deserves. We don't have a meritocracy. It's a political issue. The boss sits down with his or her boss, and they make an agreement. Then after the fact, they construct the review that they're going to give the employee to justify that raise or non-raise. It's the tail wagging the dog.
Again, the boss's job is not to create illusion. It shouldn't be that way. In the end, all of this fraud, all of this dishonesty, all of the deceit and pretense undermines the most important management tool any boss, supervisor, anyone possibly has at his or her disposal, which is a trusting relationship. Because of all the double-think, and put-downs, and indignities, and calling attention to people's flaws without even understanding what the people's assets are.
Because of all this, it's very hard to get what's your most important thing you need, is a relationship with sufficient trust that the employee can talk candidly about his or her difficulties, and what needs to be added in the way of resources for him or her to perform effectively. Without a trusting relationship, you can't talk on line about what's going wrong, and fix it before it's a conclusion.
Mark: You talk about in your articles the need for ongoing coaching throughout the year to help people be successful. Dr. Deming, who was writing about this 30 years ago, said somewhat pithily, “Substitute leadership.” One thing I meant to ask early on, since you were writing about this a long time ago. Did you meet or run across Dr. Deming, work with him, or is it just coincidence that you were both on this soapbox against the annual performance review?
Samuel: We took parallel paths, for sure. I got to see what he was up to only a few years ago, besides the fact that I have an engineering background. Then I thought, “My goodness. During the '60s, we must have been in the same room, smoking the same stuff.”
Mark: [laughs] I think he was over in Japan a great deal, working with companies over there. In the few minutes we have left, I want to turn towards…
Samuel: That's why he was in Japan. He was in Japan because the people here wouldn't listen to him.
Samuel: Maybe I should go to Japan.
Mark: [laughs] You may have a more receptive audience than you had in the “Wall Street Journal” comment section with your most recent article.
Samuel: No, that's not true. “Wall Street Journal,” in response to my article and the blogs that came in, over 85 percent of the people like what I was saying. I found that people are just as likely to dislike giving reviews as they are to receiving them. Look at HR. HR spends so much time going after managers who are late in giving their reviews. Don't get me on HR, because there's a few problems there too when we start talking about performance reviews. They become the police.
Mark: Yeah. I'm glad you corrected my bad assumption that on the “Wall Street Journal” comments, because I think I was unfairly painting my fellow [WSJ] readers as a bunch of reactionary Jack Welch worshippers that would have just defended the existing system, but I see what you mean. It's an unpleasant process. I've heard it rationalized and described as, “It's the worst system except for all the others,” to paraphrase.
Samuel: It's dumb because there's such an easy way to get around it. Many managers say, “Well, I don't like it, but I don't know what else to do.” [laughs] They blow it because there's a lot they can do. I call it the performance preview, not the review. Everybody understands what you should be doing. You should be having these open candid conversations. In order to hold those conversations, you've got to rearrange the politics inside the company.
That begins with getting rid of reviews, getting rid of the weapon that managers have that create the fear and intimidation that cause people not to want to talk candidly and openly about what they're doing. Then you've got to change the politics. You've got to tell the manager, “Look, your job is to help each individual get the most for the company. In order to do that, I'll tell you what we're going to do. You don't get partial credit for doing things. You get what the employee gets in the way of a grade. Your grade is how well you do in making sure that the company gets what it needs to get from each and every employee.”
Now you create a process where the manager can get the kind of information she or he needs in order to get the most from the company, help them to learn about one another. Because the manager's skin is in the game, he can't screw around and pretend like, “Well, I told him and he didn't do it, or she didn't do it.” The manager has to get involved and talk about, “What do you need from me in order to be effective,” and to have no fault discussions about what's going wrong as the employee sees it. If only for the employee to set the manager straight, or the manager to set the employee straight and say, “You know what? I'm glad we had this conversation because there are a few things I believe you have incorrectly.” You've got to make it no tolerance for surprises. We're not going to be surprised after the fact.
All important conversations need to take place, and if they don't take place, you're not going to bring in the results. If you don't bring in the results, nobody gets partial credit. Everybody is going to be on the bad list.
Mark: Is it fair to say that for a manager to spend that time with their employees, that's going to be fairly time consuming, so they need to be relieved of the pressure of trying to, if you will, suck up to their boss, [laughs] which is time consuming as well?
Samuel: You're right that it's time consuming to start with, because they haven't been doing it. There's too much knowledge they have to learn. Had they been doing it, in the long term, it's the most efficient and effective way of operating. You're not going to have to chase problems. You're not going to have to meet that much because over time, you're going to develop the kind of understanding of one another. Remember management by exception, you know that if the employee needs your help, she or he will ask for it. When you're not seeing, you don't have to meddle. You're right.
Initially, to build a relationship where people can be authentic and open and honest and above board, and there's always politics, but where bad politics are minimized and people start to have the kind of straight talk relationships that I wrote about in the book prior to this one. People will help one another succeed. That's the only way the company can make out.
Mark: A final question for you. Can you talk about examples, either anecdotal or research-based, of companies that have done away with the annual performance reviews and, as you predicted or seems intuitive I think to myself and others listening, have seen demonstrated performance improvement? What examples?
Samuel: March 2nd, I published an op-ed in the “New York Times.” In it we referred to, would you believe the Madison, Wisconsin cop shop, police department? It's been without performance reviews prior to the initial research done on them and a book published in the year 2000, and been continuously without performance review process, and has the most colossal teamwork. Apple Computer, as I've been told, did away with performance reviews in the year 2000. 2000 was a fabulous year. Dan Walker came in and took over as head of HR there. He also wanted to hold people accountable, and put in demands that every department come up with a plan for making sure that people learned from their mistakes and individuals grew and there was career growth, and that leadership was being fostered.
As I gathered from Dan, many of the departments reverted back to performance reviews, with their engineering minds and their rational familiar reasoning, ignoring the fact, as we've been talking about, that subjective issues are always in play. Now, Apple never publicly talks about its internal practices, but I believe that they've got a hybrid where some divisions or departments or work units have it and others don't.
Anyway, this is not that rare. I get inquiries all the time, and many, many organizations are dropping the review process, and we just have to reach critical mass when companies start to smarten up. I have one caveat, and the caveat is a lot of companies try to pretend that there's a good review process, and the only thing wrong with reviews is that they're not done appropriately. They're not done right. My last book was titled Beyond Bullshit Straight Talk at Work.
And I'll tell you, when you look at the words, the words may be nice and the conversations may be flattering, but as long as you've got one-sided, boss-dominated employee only accountable relationships, you don't have the kind of teamwork and trust that will ever allow employees to be straight and to serve the company, and have dialogue with knowledgeable managers about how we can better work together. What's our unique chemistry to give this company the kind of results it needs?
Your mentioning of Deming before, where he and I are long lost cousins. He believed, and of course I do too, that in any system, you start rewarding one kind of behavior more than another and you stop, and you don't look at individuals doing things their unique way, that what you're going to do is you're going to get people who are winning on the evaluation system with the metrics that are being used. You're going to get them defending those metrics, and not allowing companies to learn from their experience and grow and change and modify practices as they need to be.
Mark: Well, I think we'll have to leave it on that point. A fine point you make, Professor Culbert, author of the books Beyond Bullshit and most recently, Get Rid of the Performance Review, How Companies Can Stop Intimidating, Start Managing and Focus on What Really Matters. I really enjoyed talking with you today, and thanks for taking the time to share your thoughts with the listeners.
Samuel: My pleasure, Mark. I hope some of your listeners go to my website, performancepreview.com, where they can read the first chapter of the book, and maybe get turned on it and want to read the entire thing.
Mark: I hope so. Thanks again for taking the time.
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