Let’s Not Kill Performance Reviews Yet

As researchers pointed out in a recent debate in Industrial and Organizational Psychology, “Performance is always rated in some manner.” If you don’t have formal evaluations, the ratings will be hidden in a black box.

We decided to hang on to them for three reasons: fairness, transparency, and development.

Every organization has people who are unhappy with their bonuses or disappointed that they weren’t promoted. But research has long shown that when the process is fair, employees are more willing to accept undesirable outcomes. A fair process exists when evaluators are credible and motivated to get it right, and employees have a voice.

Many companies that are abandoning performance evaluations are moving to real-time feedback systems. That is an excellent way to help people repeat their successes and learn from their failures. But it doesn’t help them —or the organization— gauge how they’re doing overall.

Performance evaluations allow for an overall assessment that helps people prioritize. Employees learn what their key strengths are and where they should focus their development efforts. Evaluations also serve as a forcing function to make sure that tough feedback is delivered rather than swept under the rug.

The solution here is not to throw out performance ratings but to build a culture that recognizes and rewards growth. At Facebook we don’t believe in A, B, or C players —we’re assessing a period of time, not a person. Even David Bowie released a bad album once in a while. In fact, new evidence from a large retail company reveals that performance evaluations are surprisingly variable: People have just a 33% chance of getting the same rating from one year to the next. At Facebook we’ve found that people who receive assessments in the bottom 10% have a 36% chance of making it into the top half within a year.

Let’s Not Kill Performance Reviews Yet

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