Samuel Culbert’s new book “Get Rid of the Performance Review!” has proved itself headline-worthy. A PR person’s email to me stated, in part, “Culbert’s book has been featured in The Wall Street Journal, AP, Gannett, Reuters, the New York Post and many other outlets.” And it’s easy to see why. Almost no one likes or values performance reviews – managers who give them, and, certainly, those who are subjected to the stilted process and its results. Another lousy raise, another year in the same job, another set of unclear expectations for the future.
Thankfully, though, Culbert’s book is more than a rant against the performance review as currently practiced – though, for the first 55 pages, it is that. Manager-only reviews, 360 degree reviews and, most of all, HR organizations come are subjected to withering critique. The rest of the book provides an analysis of why performance reviews are ill-suited to their objectives (justifying pay increases, setting out critical performance goals and outlining personal development plans).
To Culbert, the structure of the review is fatally flawed. A boss of limited insight and deep personal biases (this isn’t an attack on bosses, merely a description of human beings in general) dictates the content of a review and a powerless subordinate sits there and takes it (or dissents, at some risk to her own career). The boss checks off things the subordinate is good at, and decides on some things she is not good at, and there it is.
After shooting down such an easy target, Culbert takes the remaining 170 pages or so and lays out some very commonsense but profound lessons about managing people and leading organizations. Particularly striking is this advice on compensation:
For straight talk about pay, the corporate world requires a shift in which compensation is recognized as the marketplace-dependent variable it is. Don’t mix apples and oranges by bringing up pay during a performance review. Don’t send mixed messages to subordinates, telling them one minute their performance is top-notch and then in the next minute that their pay isn’t going up.
How might this new system work?
First, bosses need to decide what pay raise and other forms of compensation they are willing to offer. Figuring out the offer entails every bit as much self-assessment (by the boss) as assessment of the subordinate’s value. Bosses need to scrutinize the bases of their beliefs about the subordinate’s talent and skills, what they are willing to pay incrementally for them, and their faith in their own capacity to provide the support needed to increase the subordinate’s productivity.
Bosses also need to assess the subordinate’s expectations and make a judgment about how the subordinate values the current compensation package, which includes such intangibles as, say, happiness with a child’s school situation or proximity to a spouse’s office, or whether they are going through a divorce. Finally, bosses need to study the marketplace. They need to know what people in comparable roles receive and assess the availability of a replacement if the subordinate leaves.
Once the compensation package is determined, it should be communicated impersonally–perhaps written down and handed to the subordinate in a sealed envelope.
At this point it’s up to the subordinate either to agree or to negotiate. If the choice is to negotiate, the ensuing “conversation” should be exclusively about pay. It shouldn’t be about performance quality or perceived “faults.” If the boss doesn’t like the quality of the subordinate’s performance and can get someone more to his or her liking, the boss should do so.
There’s tons more great stuff in the book. HR won’t like it. Neither will many bosses, because Culbert insists that bosses need to be full partners in their employees’ performance. If performance suffers, the boss is also accountable. The boss and subordinate are a team delivering results to the organization. This implies, to me, a lot of work on the boss’s part. But it’s important and crucial work.
Something has to be done to improve the current situation, which with the economic crisis has only gotten more dysfunctional. I was reading the book on a recent airplane flight and my neighbor asked me about it. Then he related a story he had lived through some years earlier.
I got a new boss who was really well-respected in the company. He thought I had potential to be promoted. He was pretty hard on me in my first review. He laid out all the things I needed to do to be ready for the next step. It was a bit harsh, but I understood. A few months later the company merged. They needed to cut staff by 20%. HR didn’t really know any of the employees, so they took the performance reviews and simply cut the people with the lowest 20% rankings – including me. My boss was appalled but there was nothing he could do about it. So instead of getting promoted I got let go.
There are probably thousands of these stories. Hopefully enough people will read and absorb the lessons in “Get Rid of the Performance Review!” that this situation will become rarer in the future. But I’m not too sure about that.
