Performance Evaluations: What's the Point?

Performance evaluations are one of those things we just do in organizations. And often we don't really know why the heck we're doing them. I recently asked a group of employees why we do performance evaluations. I asked, "Why do we bother to design fancy forms, conduct training, and write policies for performance evaluations?" The group of 25 just stared at me. One guy finally spoke up and said, "Is it to determine our pay?" When I asked whether his pay was determined by his annual performance evaluation, he said, "Well no, not really." Clearly we had some work to do.

Performance evaluations can have valuable, meaningful outcomes, for employees as well as for organizations. Still, many organizations are missing the point. We become so clouded by process, rules, forms, and steps that everyone, including the HR folks, loses sight of why we do performance evaluations in the first place. Why does your organization do performance evaluations? Here are some possible reasons:

• To align organization's goals with individual employee goals
• To determine pay adjustments
• To reinforce organizational values
• To document performance in case of a legal challenge
• To provide professional or career development

The list goes on and on. And as our list of reasons for performance evaluations grows, we often make the process much too complicated. Have you and your organization lost focus?

Take some time to think about what your organization is attempting to accomplish with performance evaluations. Is your system meeting your expectations? Is the return on the performance evaluation process greater than the time and energy that is put into it? Are you expecting too much from it?

There are many possible answers to my question, "Why do we do performance evaluations?" but I'd like to suggest that the most important reason we do them is to enhance communication between managers and employees. When we try to make the process more complicated, it loses its value.