I was reading Hacker News recently, when I found this question. The topic was performance review tools. Several responses indicated that managers generally misused the tools. Others indicated that it was the corporate culture that dominated whether the managers misused the tool or not.
One response in particular linked to a study by Texas A&M from 1987. This particular study reviewed the impact of Politics on the Review process. They interviewed 60 manager and executives from 7 major corporations across 11 functional areas. They recorded the semi-structured interviews, and from the interviews they captures 1400 quotes. If 72% of the interviews contains the topic, they bundles those cards together as a category. After establishing the categories, they performed statistical analysis on the comments to find correlations and trends.
Surprisingly, the study found that the “accuracy is not the primary concern of the practicing executive in appraising subordinates…”[Study pg. 9, the conclusion], contrary to popular belief. Instead managers used the review to “keep things cooking”[Study pg. 3, a manager quote], or motivate their employees. Naturally, then the researchers suggested that the company should then not try to eliminate politics from the equation. “The goal, then, is not to arbitrarily and ruthlessly try to eliminate politics but, instead, to effectively manage the role politics plays in employee appraisal.” [Study pg. 9, the conclusion]
However the study does have one correlation between a manager’s action and the accuracy of their review. Specifically, Managers who spent time giving feedback on a more frequent corresponded to more accurate reviews. It would be reasonable to assume that the review is more accurate because the manager spends more time with their employees, and therefore they are more aware of the employee’s actual accomplishments.
This rapid feedback cycle reminds me heavily of Agile software development. The main principle behind agile is rapid iteration and feedback. The ideas is that small feedback cycles produce better software because you learn more quickly and can more easily adapt to changing needs.
With this in mind, I suggest that the increased accuracy of the reviews is not in fact due to the manager’s increased awareness. Instead, It is because the manager no longer needs to use the review as their primary motivational tool. By frequently offering feedback the manager is able to address problems early, when they require little effort. They are able to praise the recent good actions more quickly, keeping morale high. As a result, the manager can use the review as an actual measurement of the employee’s accomplishments, instead of having to use it as a lever to move them.
People are right to observe that performance reviews are not as accurate as they should be. The study agrees with this observation. The study further indicates the cause may be from managers using the performance review as a motivational tool. Using the review this way results in increased political ‘adjustment’ of the review. In the end, we are left with lower accuracy and the general suspicion of performance reviews.
The study also indicates there may be ways to encourage the use of accurate performance reviews again. Managers who provide more frequent feedback were correlated to more accurate reviews. This increased accuracy comes from having another tool to fill the communication and motivational need. This allows the review to serve its original purpose.