1. Undermines Teamwork
Teamwork suffers when your incentive system primarily recognizes individual achievement. Collaboration is key to producing quality software.
2. Undermines Autonomy & Purpose
Feeling like you're performing to get a carrot (raise or promotion) or avoid a stick (termination) undermines an individual's sense of autonomy and purpose which is strongly tied to intrinsically motivated behavior. It is critical to have intrinsically motivated people in creative problem-solving jobs like software development. (See previous posts).
3. Damages Trust Between Manager and Subordinate
It reinforces the idea that the manager's role is primarily to evaluate and critique. Instead of being on the same team working toward common goals, the performance review clearly places the manager and subordinate in antagonistic roles on opposites sides of the table. It reinforces the worst boss stereotypes.
4. Not Objective
No one has found a good way to quantify a software developer's performance. The reviews are always skewed by a manager's biases and preferences.
5. Inhibits Communication
It allows managers to postpone feedback and guidance that should be happening daily.
6. Creates Resentment and Jealousy
Especially if tied to raises and promotions. This perception of unfairness can turn into a toxic poison that can kill an organization's effectiveness and cohesion.
7. Can Turn A Good Man (or Woman) Bad
Why take an otherwise happy, productive employee and slap him or her in the face periodically?
8. Turns Focus Inward
Rather than focusing on external competitors, people start focusing on internal competitors. This is especially true when combined with a zero-sum game, stack ranking system. "For me to win, others around me need to lose."
9. Demotivates Risk Takers
How much risk will an individual take to try something innovative if they're worried about how it may effect their performance review if it doesn't work out?
10. Not Really Tied to Compensation
Compensation is primarily driven by market forces outside of the company's control.
11. Hurts New Talent Acquisition and Development
It's against an existing employee's interests to recruit, hire, and mentor rising new talent that might outshine them.
12. Hurts Company Image
Implementing worn-out and generally discredited HR techniques such as stack rankings (even GE has abandoned rank and yank policies) makes a software company appear non-progressive and stodgy. Cutting-edge tech companies are trying to find ways to scale the "start-up" experience (no one in a start-up gets a performance review; everyone's too focused on trying to survive.)
13. Great Managers Don't Need It
Great managers build high levels of trust and communication daily.
14. Great Developers Don't Need It
You're hiring great developers aren't you? Software developers are creative problem-solvers. They love to collaborate and learn. They don't need a stick or carrot to motivate them to achieve great results, but traditional performance incentive plans sure can stifle that natural instinct.
15. Misleading
When combined with a stack ranking system, it forces managers to differentiate talent where no clear differentiation exists. An individual's contributions are too varied to be captured effectively with the crude tools typically used like Likert scale questionnaires. A focus on the individual ignores the symbiotic nature of a team. That overlooked guy on the team could be a key facilitator - the glue that holds a highly productive team together.
16. Slows Down the Process of Removing Bad Apples
Rather than recognizing a poor hire as soon as possible and correcting the situation, the performance review process can encourage managers to drag things out for months and even years.
17. Provokes Lawsuits
The person who feels abused and mistreated during the review process may feel that their only way to get even is to talk to a lawyer.
18. Misdirects Energies
It makes pleasing the manager the primary focus, with pleasing customers and supporting peers secondary. It also assumes that performance issues are primarily the problem of the individual. From a systems theory perspective, if an individual isn't thriving, it's more likely that there is something wrong with the system that they're in; the dysfunctional system is where energy should be directed.
19. Drain on Time and Resources
It takes a huge effort to prepare and manage all the documentation around the performance review.
20. Everyone Hates It
Even the managers who have to administer the review dread that time of the year.
If you're still not convinced, check out this WSJ article:
http://online.wsj.com/article/SB122426318874844933.html
Teamwork suffers when your incentive system primarily recognizes individual achievement. Collaboration is key to producing quality software.
2. Undermines Autonomy & Purpose
Feeling like you're performing to get a carrot (raise or promotion) or avoid a stick (termination) undermines an individual's sense of autonomy and purpose which is strongly tied to intrinsically motivated behavior. It is critical to have intrinsically motivated people in creative problem-solving jobs like software development. (See previous posts).
3. Damages Trust Between Manager and Subordinate
It reinforces the idea that the manager's role is primarily to evaluate and critique. Instead of being on the same team working toward common goals, the performance review clearly places the manager and subordinate in antagonistic roles on opposites sides of the table. It reinforces the worst boss stereotypes.
4. Not Objective
No one has found a good way to quantify a software developer's performance. The reviews are always skewed by a manager's biases and preferences.
5. Inhibits Communication
It allows managers to postpone feedback and guidance that should be happening daily.
6. Creates Resentment and Jealousy
Especially if tied to raises and promotions. This perception of unfairness can turn into a toxic poison that can kill an organization's effectiveness and cohesion.
7. Can Turn A Good Man (or Woman) Bad
Why take an otherwise happy, productive employee and slap him or her in the face periodically?
8. Turns Focus Inward
Rather than focusing on external competitors, people start focusing on internal competitors. This is especially true when combined with a zero-sum game, stack ranking system. "For me to win, others around me need to lose."
9. Demotivates Risk Takers
How much risk will an individual take to try something innovative if they're worried about how it may effect their performance review if it doesn't work out?
10. Not Really Tied to Compensation
Compensation is primarily driven by market forces outside of the company's control.
11. Hurts New Talent Acquisition and Development
It's against an existing employee's interests to recruit, hire, and mentor rising new talent that might outshine them.
12. Hurts Company Image
Implementing worn-out and generally discredited HR techniques such as stack rankings (even GE has abandoned rank and yank policies) makes a software company appear non-progressive and stodgy. Cutting-edge tech companies are trying to find ways to scale the "start-up" experience (no one in a start-up gets a performance review; everyone's too focused on trying to survive.)
13. Great Managers Don't Need It
Great managers build high levels of trust and communication daily.
14. Great Developers Don't Need It
You're hiring great developers aren't you? Software developers are creative problem-solvers. They love to collaborate and learn. They don't need a stick or carrot to motivate them to achieve great results, but traditional performance incentive plans sure can stifle that natural instinct.
15. Misleading
When combined with a stack ranking system, it forces managers to differentiate talent where no clear differentiation exists. An individual's contributions are too varied to be captured effectively with the crude tools typically used like Likert scale questionnaires. A focus on the individual ignores the symbiotic nature of a team. That overlooked guy on the team could be a key facilitator - the glue that holds a highly productive team together.
16. Slows Down the Process of Removing Bad Apples
Rather than recognizing a poor hire as soon as possible and correcting the situation, the performance review process can encourage managers to drag things out for months and even years.
17. Provokes Lawsuits
The person who feels abused and mistreated during the review process may feel that their only way to get even is to talk to a lawyer.
18. Misdirects Energies
It makes pleasing the manager the primary focus, with pleasing customers and supporting peers secondary. It also assumes that performance issues are primarily the problem of the individual. From a systems theory perspective, if an individual isn't thriving, it's more likely that there is something wrong with the system that they're in; the dysfunctional system is where energy should be directed.
19. Drain on Time and Resources
It takes a huge effort to prepare and manage all the documentation around the performance review.
Even the managers who have to administer the review dread that time of the year.
If you're still not convinced, check out this WSJ article:
http://online.wsj.com/article/SB122426318874844933.html
Hi Chad--another great post. I wrote something quite similar on my blog a while back. I discontinued the use of this anachronistic practice when I came on board with Hyperformix.
ReplyDeletehttp://multicastmatt.blogspot.com/2013/03/why-did-we-stop-annual-performance.html