Performance evaluations are a less about performance and more about enforcing hierarchy and authority. A more apt name for performance evaluations is obedience training.
The most extreme form of performance evaluation that I’ve come across was at a large software company based in Redmond, WA whose name I won’t mention. Because this company was very successful, it was possible for the employees to take home as much in bonus as they did in salary (i.e. a bonus equivalent to 100% of salary). The opportunity to double your salary is an opporunity that most people would fight for and this massive bonus scheme caused fierce competition within the company.
When I was last there (several years ago, now) work done by permanent employees would stop during the performance evaluation season. The only work that was completed was done by contractors and vendors. I personally struggle to see how this type of reward and behavior is useful or constructive to the companies goals.
Performance reviews are harmful and completely unnecessary
Since my experience with the large software company, I’ve become more and more sceptical about the benefits of performance reviews and my current opinion is that they are harmful and completely unnecessary. And it’s good to see that there are others out there who share the same sentiment. Two particularly noteworthy writers on this topic are Esther Derby and Samuel Culbert. Esther Derby has written a number of interesting blog posts on the topic which you can find here: http://www.estherderby.com/tag/annual-reviews
Samuel Culbert is professor of management at the UCLA Anderson School of Management in Los Angeles and author of the book “Get Rid of the Performance Review!” Here’s a nice quote from an article that he wrote for the Wall Street Journal in 2008.
The alleged primary purpose of performance reviews is to enlighten subordinates about what they should be doing better or differently. But I see the primary purpose quite differently. I see it as intimidation aimed at preserving the boss’s authority and power advantage. Such intimidation is unnecessary, though: The boss has the power with or without the performance review.