Universally, the people I work with hate performance reviews. While I agree that labor law has resulted in the process being somewhat bureaucratic, the purpose of the process remains valid:
- to ensure alignment of employee effort against company priorities
- to give the employee an opportunity to “course correct” on their efforts
- to provide feedback on employee strengths and areas for growth
- to solicit feedback from the employee on how well the manager is supporting the employee’s success

Although I have seen multiple formats for review forms, they all (according to law) should include 3 parts — progress against goals (what), feedback on effectiveness (how) and a section of development planning. The “progress against goals” section provide clarity of direction and the definition of “success”. Ideally, the goals for each employee should be derived directly from the organizational goals and priorities. These goals should be measurable and objective — the employee should be able at any time to know how well he or she is doing against those goals. If the company direction or priorities change (which should only happen if there is a significant change in the environment), it should trigger a formal revisiting of the employee’s goals by the manager.

Although this section should be the easiest on which to rate the employee, many companies don’t do a good job of setting measurable goals in advance, so that when it comes time for the review the manager is left scrounging for notes on what the employee actually did. A good planning process that involves all senior leaders can ensure that every group has identified the contributions they need to make to company success — and then the manager can link individual goals to these group goals.

The “feedback on effectiveness” section addresses those employees that get results, but at a huge cost to the rest of the organization. In this section, the employee is rated against “performance factors” — qualitative characteristics that reflect the company’s desired culture. There is a need to be careful in defining these factors — the company should be able to prove that these “soft skills” are directly linked to success, and they cannot measure “attitude” or be used as a way to discriminate.

Finally, the “development” section of the review process should enable the employee and the manager to agree on which one or two skills the employee needs to develop in order to grow in value to the organization, Ideally, one of the elements of the company culture should be a commitment to getting and addressing feedback — this section allows the manager to work with the employee to agree on what and how the employee will focus development energy, and how progress will be measured.

So if the performance review process is so basic, why do managers hate it? Partly because the process has either been made too complex, or the company does not engage in a planning process that provides the framework for establishing goals and performance factors. Or perhaps the manager has never learned how to effectively deliver feedback. All of these are indicators of a gap that will hurt the company in other areas also.