Reports of the death of performance reviews are exaggerated
Is this new system of employee reviews any better than the old? There are good arguments for getting rid of ranking and yanking: the ritualistic decimation of the workforce on the basis of a single number routinely paralysed businesses in the run-up to each year’s reviews, killing creativity and setting workers against each other. Thereafter the picture is murkier.Four changes are proving particularly popular. First, companies are getting rid of “ranking and yanking”, in which those with the lowest scores each year are sacked. GE, which practised this system with particular enthusiasm under its previous boss, Jack Welch, has now dropped it. Second, annual reviews are being replaced with more frequent ones—quarterly, or even weekly. Third, pay reviews and performance reviews are being separated. And fourth, some performance reviews are turning into performance “previews”, focusing more on discovering and developing employees’ potential than on rating their past work.