Performance reviews may not be so useful

Monday, January 20th, 2014 By Jack Nevison

Do performance reviews help managers maintain a workforce of effective individuals? Or do they actually harm productivity? Samuel Culbert, a professor at UCLA Anderson School of Management and author of a recent book on the subject, argues that the latter is true.

As reported in a recent Inc.com article, Culbert's book, "Get Rid of the Performance Review: How Companies Can Stop Intimidating, Start Managing and Focus on What Really Matters," claims that traditional reviews are "destructive and fraudulent" and only seek to display "power and subordination."

Adherents to this way of thinking have some studies to back them up. The Society for Human Resource Management recently found that nine out of 10 performance reviews are meaningless and often fail to improve overall performance.

Though most companies still insist on conducting these reviews, a few have chosen a different route. One example provided by Inc.com is Shopify, an Ottawa-based software company that helps users create online stores.

Shopify employees can participate in a rewards program that involves tokens. Every employee receives the same number of reward tokens, which they are asked to award anonymously to fellow employees, based on the others' job performance. The company then allots bonuses based on how many tokens a person has earned. The result is that workers who may have been overlooked by their bosses ended up being rewarded for their efforts.

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