Hated by bosses and subordinates alike, traditional performance
appraisals have been abandoned by more than a third of U.S. companies.
The annual review’s biggest limitation, the authors argue, is its
emphasis on holding employees accountable for what they did last year,
at the expense of improving performance now and in the future. That’s
why many organizations are moving to more-frequent, development-focused
conversations between managers and employees. The authors explain how
performance management has evolved over the decades and why current
thinking has shifted: (1) Today’s tight labor market creates pressure to
keep employees happy and groom them for advancement. (2) The rapidly
changing business environment requires agility, which argues for regular
check-ins with employees. (3) Prioritizing improvement over
accountability promotes teamwork. Some companies worry that going
numberless may make it harder to align individual and organizational
goals, award merit raises, identify poor performers, and counter claims
of discrimination—though traditional appraisals haven’t solved those
problems, either. Other firms are trying hybrid approaches—for example,
giving employees performance ratings on multiple dimensions, coupled
with regular development feedback. INSET: CAN YOU TAKE COGNITIVE BIAS
OUT OF ASSESSMENTS?. [ABSTRACT FROM AUTHOR]