By Mark Carey
The dreaded performance review has been cancelled, but maybe not really. Companies large and small have been moving away from using performance reviews to measure performance for some time. “Nearly half (49%) of companies give annual or semiannual reviews and [o]nly about 1 in 4 companies in North America (26%) said their performance management systems were effective, according to a survey of 837 companies.” (Source). Employers now use terms like “feedback”, “feedforward” in place of performance reviews. Are you confused? You should be.
Employers Are The Problem
Performance management and performance reviews falls under a term I coined Employnomics®. Employnomics® covers literally every aspect of the dysfunctional work relationship between corporate management and employees, including the unlawful use of performance reviews to act as cover for employment discrimination and termination of otherwise qualified and successful employees. The term helps explain why employees never get a benefit from entering into a noncompetition agreement, because there isn’t one. The term explains why employers push employees into forced arbitration agreements to hide their discriminatory and previously distorted sexual harassment cases (now illegal). The term helps explain why there is wage inequality between genders, because employers believe men should be paid more. (For a robust discussion on wage inequality read a Nobel Prize winning report – Why Women Won by Claudia Goldin). The list of situations covered by the term Employnomics® is endless, but at least now we have a word to describe selfish employer behavior designed solely to maximize profit and dehumanize employees.
As an employment attorney advising executives and employees at all levels, I provide employers with my version of the “performance review” specifically identifying the unlawful or illegal actions imposed on our clients. We use lengthy sworn client affidavits, extensive Notice of Claims letters and even federal lawsuits to shame employers. Shame is king! Employers do not like it when we review them because we speak the truth that employers refuse to acknowledge, not even to the SEC. Who else is going to review employers and evoke meaningful change, Glassdoor or the U.S. Equal Employment Opportunity Commission? Give me a break! Employees are on their own and employers love to manipulate this current dysfunctional relationship to their twisted advantage and at an extreme economic cost to employees. Not on my watch!
Performance reviews were/are an integral part of the dysfunction forced on employees. The act of conducting a performance review produces anxiety and dread among employees. A recent Wall Street Journal Article on September 12, 2023 titled “Bosses Say Feedback Is Too Scary for Some Workers, So They Use This Word Instead“, examined “feedback” given to employees was too scary for some employees because of the anxiety-inducing word. The article fell flat for me because feedback is just another word for performance review developed by expensive management consultants attempting to engage in semantics to get employees to conform under management’s constant control.
Likewise, 95% of all managers hate giving annual performance reviews because they are time consuming and offer little evidence the review will provoke the type of reaction it was intended to have, i.e. better performance and more profitability. Adding insult to injury, managers lack the appropriate training to provide an effective performance review and probably cannot communicate “effectively” to promote change in any employee. In case you did not know this fact, companies do not train managers to manage or provide effective performance reviews. Managers train themselves on the job!
Another contributing factor in the continued use of performance reviews is that it is “big business” for software companies. Software companies such as SAP (Success Factors) and Workday (HCM) cost employers annually $15,000 to $60,000 per year for the license to use the software. (Source).
Phrases and words like “performance review”, “feedback”, and even “performance improvement plans”, are all relics of an older employer regime that has lost connection with employees, who ironically make them profitable. Disengaged employees already know performance reviews are a joke and have little bearing on their jobs. Currently, most employees have figured out that performance reviews are used to set up employees for termination. Finally, some really ill-minded managers use performance reviews to further their discriminatory biases.
Employees Are the Solution
The most ridiculous aspect regarding problems associated with the use of performance reviews is that employers never include employees in the development of an effective performance management system. Employers may claim they do, but don’t believe it. The situation is so acute right now that employee engagement is at an all-time low. Performance Reviews and employee engagement are one in the same. According to Gallup, U.S. Employee Engagement Needs a Rebound in 2023, “the engagement elements that declined the most from the pre-pandemic record-high engagement ration in 2019 to 2022 were:
· Clarity of expectations
· Connection to the mission or purpose of the company
· Opportunities to learn and grow
· Opportunities to do what employees do best
· Feeling cared about at work”
Employees need to feel they are part of the conversation instead of being dictated to by authoritarian systems called “Employers”. “Trust” (or feeling cared about at work)- a simple word with a common understanding to millions of employees, but unfamiliar with to employers. Employee engagement and performance will dramatically increase once employees feel they can trust employers. However, today, employers continue to perpetuate the At-Will Employment Management System resulting in employees not knowing what hour or day of the week they will be fired. Trust and feeling that you are part of a “Family” instead of “Team” will go a long way to reducing performance issues and growing employee engagement. You cannot get to the other items on the Gallup list above unless you provide a working environment where employees feel more secure.
Employers spend millions of dollars on expensive consultants yet miss the mark completely. Employers are afraid of giving employees control over their jobs. I am not talking about unionization; I am talking about giving employees a voice and the ability to work in an environment where they matter and can connect to the mission of the employer. (Employees Matter) More importantly, employees today more than ever need to know they are participating in something for the common good, i.e. social issues, and the environment. Also known as ESG (Environmental Social and Governance).
When employers begin to recognize employees as valuable individuals instead of human capital on a spreadsheet and develop a trusting working environment, performance and employee engagement will flourish.
As always, my concern is about where employees (management and subordinates) are headed and whether employees have the right information to make rational decisions, beyond what their employer is willing to provide. I have no filter because I don’t have a manager and I believe it is my responsibility to fill the vacuous void where no other employment attorney wants to tread for fear of being canceled. Yes, I do negatively criticize important employee focused topics, like performance reviews, because no one else will. If you would like more information about this article, please contact our employment attorneys at Carey & Associates, P.C. or send an email to firstname.lastname@example.org.