Too many managers are lazy in speaking regularly with their employees and they depend on a few sheets of paper once per year to be the one time that their is any meaningful dialogue between manager and employee. The truth is that an employee's performance review is more indicative a manager's effectiveness at communication and coaching. The only upside to formal reviews is that it forces "absent" managers to communicate with their people - which, on the downside, can create animosity based on a poor review because of poor management.
Employees will engage only as well as managers engage the employee. If the manager is engaged with the employee, performance can be guided daily so that any need for a formal review becomes obsolete. A manager should have a conversation with his/her individual team members daily, no excuses, to hand out an "atta-boy," something to work on or just even having a heart-to-heart - but something that touches the real person inside.
Rarely do you see a document handed to a new employee which clearly states the metrics in which they are to be measured over the next year. In all fairness to employees, having a document that they can post at their desks which outlines the very things they are being measured on makes it easier for the employee to work toward achieving a good score. In other words, "tell me what I am going to be measured on and I will do only that."
But the most crucial part of a performance review, if you're going to do them, should be the employee's review of their immediate supervisor. This is far more important than the review of the employee. The employee is only ever going to perform as well as his/her manager. That's a given. Rarely do you find the magnanimous manager who encourages the employee to perform beyond the manager's ability to coach. So the most important document becomes the review of the manager by the employee and NOT the other way around.
Look, people don't leave their jobs. They leave their bad managers. So, it would stand to reason, purely by the numbers, that the department with the highest staff turnover and lowest performing employees would have the worst manager running it. Conversely, the department with the lowest turnover and highest performing employees would likely be run by the most engaging manager.
Employees are only ever going to perform as well as their managers allow. Poor employee reviews all coming from one department are more indicative of the manager than the employees. And it is for this reason that employee reviews should be scrapped. If you have a lousy manager, you will have unhappy, disengaged, poorly performing employees who get a poor review as a byproduct of their bad manager. Mediocre managers = mediocre employees. Managers who engage with their staff fully will likely have staff who are fully engaged - more productive, higher achieving and more fulfilled in their work.
Making the employee the sole person responsible for performance creates a lose-lose scenario and hurts performance Culture. You cannot review the employee until you have fully engaging, openly communicating, strong managers who are able to derive high-performance from their employees. You don't need a formal review if you have daily interactions and conversations one-on-one with your employees.
Annual Reviews were designed by Baby Boomers who, at the time, believed in only communicating with employees if and when something needed to be addressed. So, why do them? Organizations do them because it's what they've always done - which certainly doesn't make it right. It just makes it old. With all of the advancements in gadget technology, we're still using old, outdated HR technology in trying to get people to perform better.
Performance Reviews are old-school. They are the equivalent of a high-school report card - which, unless you had all "A"s, you were afraid to show your parents. Same rules still apply. Everyone wants to get an "A" but it's hard to get if the teacher sucks. But the best teachers, and the best managers, are the ones who encourage high-performance and equip their people with the tools to do it for themselves. That doesn't happen in a formal environment annually. That happens by engaging every single day.
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