Why ditching appraisals is a stupid idea

The HR fad for scrapping performance reviews won't benefit either employers or employees.

by Tomas Chamorro-Premuzic

The past few months have seen a great deal of discussion about the uselessness of performance evaluations.The Wall Street Journal and The New York Times, a cover feature in Harvard Business Review, and a global PR campaign by Accenture - the most prominent corporation to announce they have ditched annual performance evaluations - all suggest that organisations are ready to stop judging what employees do (and don't). But is there a clear rationale for this latest HR fad? Is it simply a populist PR move - surely most employees like the idea that they won't be evaluated any more, not least because they are coasting or slacking in their jobs - or the next stage in scientific management?

On the one hand, firms could be forgiven for eliminating appraisals. The main reason is that most of them are indeed rather pointless: they are subjective, political and rarely based on reliable data; and few managers are willing or able to provide what employees need the most, which is negative feedback. On the other hand, completely scrapping them isn't the solution.

First, in any organisation performance reflects a Pareto effect, whereby 20% of the workforce accounts for 80% of productivity. Ignoring who the 20% are, or being unable to distinguish between them and the rest, will alienate and repel talent. Second, performance evaluations are the best way to set compensation, bonuses and rewards, and most employees agree with this. Third, unless employees are provided with feedback, they will have no idea of how to get better. Self-assessments don't work because most people think they are better than they actually are, and this affects how they evaluate their performance at work.

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