Employees don’t hate performance reviews; they hate lousy performance review processes
If you type the term “employees hate performance reviews” into Google, 1,290,000 results populate in return with titles like “Yay, It’s Time for My Performance Review! (Said No One Ever)” (NPR, 2016), and “Study Finds that Basically Every Single Person Hates Performance Reviews” (The Wall Street Journal, 2010). The wave of survey data condemning performance reviews might reasonably lead one to believe that people hate having their performance evaluated. But such a belief is not particularly accurate. According to research, employees don’t inherently dislike being evaluated, and in fact crave managerial feedback1, 2. What employees do dislike is being evaluated if they don’t know when, why, or based upon what criteria they are being judged.
To be effective, a performance review process must be transparent. Not only must leaders explain the assessment/calibration process, criteria and outcomes to employees, but they must also do so in a way that these employees perceive as being fair, accurate and appropriate.
Employees’ perceptions of fairness in the workplace is referred to in psychology as “organizational justice”3. Decades of research on organizational justice suggest that there are certain things that employees can be told before, during and after a performance assessment that will improve their overall sense of satisfaction with the raters and ratings themselves. This research has identified three distinct types of justice, how to achieve them, and their impact on organizational results.
What it is: The fairness associated with the procedures and policies used to evaluate performance3, 4.
How to achieve it: Ensure that employees understand the methods used to evaluate their performance and that they trust that these methods are fairly and consistently applied.
An example: Making the specific rating criteria used by leaders public to all employees, or publicly posting a calendar with all to-be-performed performance management activities.
Why it matters: Procedural justice can influence work performance5, pay satisfaction11, appraisal system satisfaction6, trust in management7, and organizational commitment8.
What it is: The fairness of interpersonal interaction during the performance appraisal4,8, including how information and decisions are communicated to employees9.
How to achieve it: Present appraisal information and results in a caring, sensitive and personal manner.
An example: Communicating evaluation outcomes in-person rather than sending results in an e-mail.
Why it matters: Interpersonal justice influences employee satisfaction with rating results, sentiment toward company managers and leaders, and commitment and effort toward work6.
What it is: The fairness associated with ratings themselves10; in essence, do employees feel they received the rating they deserve?
How to achieve it: Via procedural and interpersonal justice. Most employees can accept that they may not always receive the highest ratings provided they believe the process was fairly designed and consistently followed, and that relevant information was appropriately and sensitively communicated.
An example: Providing employees with an opportunity to express their voice, emphasizing ways for employees improve, and avoiding surprises (give ongoing feedback) can all ensure greater perceptions of distributive justice.
Why it matters: Distributive justice can influence employee satisfaction with the rater and/or rating process6, but has less impact on overall employee attitude and behavior than procedural and interpersonal justice.
While the term “performance reviews” may always be tainted, your employees’ perceptions of them need not be. Employees want feedback on their performance and they want to know how the company evaluates their contributions. Creating transparent performance assessment methods and effectively communicating assessment results is fundamental to creating a strong sense of organizational justice within your workforce. Employees know that their performance is going to be evaluated and they can accept that “not everyone gets a trophy”. What they cannot accept are performance evaluations done in secret and trophies handed out based on inconsistent and poorly defined criteria.
- Ashford, Blatt & Walle (2003)
- Sherwood, 2016 ((https://www.forbes.com/sites/sap/2016/04/29/5-common-myths-of-employee-feedback/#4b59273d227b)
- Greenberg (1987)
- Erdogan (2002)
- Swiercz et al. (1993)
- Taneja et al. (2015)
- McFarlin & Sweeney (1992)
- Bies & Moag (1986)
- Smither (1988)
- Folger (1977)