Annual reviews are having performance problems

Is your looming annual performance review getting you down? You aren’t the only one.

Driving the news: Nobody likes performance reviews. Not only do they stress out employees, but more and more companies are starting to think they do a crummy job of actually evaluating job performance. 

  • A Gallup poll found that 95% of managers don’t like their organization’s review system, while only 20% of employees feel “inspired” by reviews to perform better.

  • Block CEO Jack Dorsey recently axed annual performance reviews, instead moving to providing ongoing feedback to employees throughout the year.

Why it matters: The options to replace annual reviews have their own drawbacks. For example, even though ongoing evaluations are getting more popular, they give companies that are eager to make cuts more chances to fire staff, which doesn’t do wonders for morale.

Zoom out: Stack ranking is resurging in the tech sector. Popularized by GE in the 1980s, the method places workers in tiers, with those at the bottom of rankings at risk of being let go — but GE stopped in 2016 when it found that it hurt morale and didn’t help performance.

  • In the past, it has also created “poisonous” cultures at Microsoft and Amazon that inadvertently encouraged competition and even sabotage between employees.

Bottom line: Research suggests the key to constructive evaluations is managers showing humility throughout. So if you’re looking to improve your reviews, spend less time thinking about the process and more time considering whether you’re being a bit of a jerk.—JK