7 June 2007

Screwing Performance Reviews?

Pawell Brodzinski, an IT project management blogger from Poland, wrote a blog post lamenting annual performance reviews a few weeks ago.

Today I dicoverred an excellent article from the Harvard Business Review (Kohn 1993) proposing that they are counter productive. It's called "Why Incentive Plans Cannot Work" and you can read it here. It's appended by responses from industry experts which gives the whole peice a good all-round point of view.

In my reading I have yet to come across a better summary of the value of incentive based pay. If you are a manager and about to kick off your performance review process I highy recommend reading this article.

I also researched my way to another article called MONSTER - Monitoring Satisfaction To Ensure Retention.

What's neat about this article is that it applies the Kano quality framework to the idea of job performance and reward. As I was reading the Kohn article my mind kept flicking across to the same ideas; that sure money counts, but is more of a basic requirements than a reason to get excited about work.

4 comments:

  1. In my opinion Kohn flatten the case of incentive plans to the "factory worker" case. The whole energy of the article is put against "do this and you'll get that" model of rewarding. There are a lot of more sophisticated options in the area, which don't suit to Kohn's argument.

    The thing I definitely agree is that even the best incentive plan can't be a substitute for intrinsic motivation for employees. But it doesn't automatically mean that incentive plan won't work at all or it's unimportant.

    I could continue discussion with Kohn, but their adversaries have already done the job. My point is still: performance reviews and incentives are very important, although they're usually done rather poorly.

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  2. John Paterson12:40 pm

    Then there's the comment on the same subject in today's The Age Management Line blog: http://blogs.theage.com.au/managementline/archives/2007/06/perormance_appr.html

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  3. And, just to clarify, performance review and rewards are two different things. It's the second that is in debate. Performance Reviews are a must because they are the barometer of any company's health. What you do with that data is another issue - rewards is just that.

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  4. Craig9:14 am

    As a contractor I am generally free from eprformance reviews but continue to seek feedback on my work, so I am not an expert on the process of the annual performacne review.

    It seems though that both managers and staff hate the administrative burden and the apparent unfairness of the process.

    I particularly liked the line in the article John referenced about how 80% of people get rated above average.

    What would you guys suggest to make the process better?

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