Category Archives: *The Wall Street Journal

Slamming the Door on Performance Reviews

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Topic: Assessment, Organizational Performance, Performance Appraisal
Publication: Wall Street journal
Article: Get rid of the performance review. 

Author: S.A. Culbert
Feature by: Benjamin Granger

Annual pay and performance
reviews are rarely fun (We can all attest to that!).  But it remains a common practice in many organizations.  Surely there’s a good reason why we have
to go through this sometimes painful process (“my review is today, I can’t wait
to hear about all my weaknesses!”).  Although performance appraisals (PAs) are usually intended to
help with pay and promotion decisions as well as help employees develop, some
experts find PAs to be downright silly!

In a recent article
published in the Wall Street Journal,
Samuel Culbert provides several reasons why organizations should toss performance
reviews out.  Culbert argues that
in practice, performance reviews often do NOT accomplish what they purport to
accomplish.  PAs are supposed to
lead to employee and organizational improvement but often result in quite the
opposite.  But, why?  Culbert suggests that:

1).
PAs foster the power gap between supervisors and subordinates.  Ideally supervisors and subordinates are
teammates who work together to meet a common goal.  PAs make this unlikely.

2).
PAs are not objective.  Even when
supervisors gather data from 360s, reviews are based on personal judgments.

3).
PAs are likely to lead to employee behaviors that are intended to please the
supervisor (ingratiation) and not necessarily behaviors that lead to improved
performance.

4).
PAs don’t really determine pay, market forces do.  At best, PAs are stories that are used to justify employee
pay.

In addition to his assault
on performance reviews, Culbert offers a possible alternative: “two-side,
reciprocally accountable, performance previews”.
While the performance review focuses
on “what went wrong in the past”, the performance
preview keeps the supervisor and subordinate focused on the future.  The tone of a preview is how the
supervisor and the subordinates can work together as teammates in the future.  Both parties are accountable in the preview.
 The conversation in a preview is
not one-sided like the review (employee as the receiver).  Additionally, the preview is more likely
than the review to lead to trusting relationships between the supervisor and
his/her subordinates which is a necessary first step to employee and
organizational improvement. 

Culbert, S.A.
(2008). Get rid of the performance review. Wall
Street Journal. 

Pay-for-performance: Helping those that help themselves?

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Topic: Compensation, Motivation, Rewards
Publication: The Wall Street Journal
Article: When schools offer money as a motivator.
Blogger: James Grand


Pay for performance Long gone are the days when Mom and Dad would offer a few bucks
for an “A” on your report card to buy some candy from the grocery store.  Now, the schools are starting to provide
the incentives—and they aren’t just offering up bubble gum and lollipops.

A recent article from The
Wall Street Journal (August 21, 2008) reported that a number of schools
around the country are implementing new pay-for-performance (PFP) systems as
means of encouraging high school students to enroll and pass Advanced Placement
(AP) courses.  The performance
rewards (in some cases, upwards of $1000)
are given to the top performing students on the various AP exams.  With a great sigh of relief from its investors,
longitudinal analyses of the PFP systems have shown mostly positive
results—higher enrollment in AP classes, higher test scores and more graduating
seniors moving on to college (whew).

But should schools (and other organizations, for that matter) be
wary of the PFP reform?  Research
from organizational psychology, management and education indicates that
although PFP is generally linked to higher overall performance and satisfaction
across a variety of domains, there are a number of consequences that should be
carefully considered before they are used (Rynes, Gerhart, & Parks, 2005,
provide an excellent review of the
issues associated with PFP systems). 
For example, there is evidence to suggest that PFP is more attractive to
individuals’ with greater need for achievement and self-efficacy, which are
often related to characteristics such as education level and even gender or
race in many work domains.  Thus
PFP systems have the potential to create discriminative compensation practices
or entirely homogenous workforces if not carefully monitored.  Furthermore, in jobs/tasks where units
of performance are not clearly established (i.e., subjective supervisor
ratings, etc.), the benefits of PFP are often difficult to determine and may
actually be detrimental.

Time will tell if PFP catches on in our nation’s schools—in the
meantime, I suppose a bag of M&M’s never hurt anybody.

Singer-Vine, J.
(2008, August 21). When schools offer money as a motivator. The Wall Street
Journal. pp. D1.