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March 1, 2011

Why Your Boss Is Wrong About You

By SAMUEL A. CULBERT

Los Angeles IN the raging battle over union rights in Wisconsin, those seeking to curtail collective bargaining for state employees have advanced an argument that seems hard to resist: It will make it easier to reward those workers who perform the best. What could be fairer than that? If only that were true. As anybody who has ever worked in any institution private or public knows, one of the primary ways employee effectiveness is judged is the performance review. And nothing could be less fair than that. In my years studying such reviews, Ive learned that they are subjective evaluations that measure how comfortable a boss is with an employee, not how much an employee contributes to overall results. They are an intimidating tool that makes employees too scared to speak their minds, lest their criticism come back to haunt them in their annual evaluations. They almost guarantee that the owners whether they be taxpayers or shareholders will get less bang for their buck. In other words, there may be lots of reasons to restrict collective bargaining by state workers, but the idea that it will lead to a fairer system of rewarding employees, to the benefit of taxpayers, should not automatically be counted as one of them. Performance reviews corrupt the system by getting employees to focus on pleasing the boss, rather than on achieving desired results. And they make it difficult, if not impossible, for workers to speak truth to power. Ive examined scores of empirical studies since the early 1980s and have not found convincing evidence that performance reviews are fair, accurate or consistent across managers, or that they improve organizational effectiveness. Think about it. Performance reviews are held up as objective assessments by the boss, with the assumption that the boss has all the answers. Now, maybe your boss is all-knowing. But Ive never seen one that was. In a selfinterested world, where imperfect people are judging other imperfect people, anybody reviewing somebody elses performance whether as an actor, a writer, a spouse, a

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friend or a worker is subjective. Its why when employees switch bosses, more often than not their evaluation changes as well. Under such a system, in which ones livelihood can be destroyed by a self-serving boss trying to meet a budget or please the higher-ups, what employee would ever speak his mind? What employee would ever say that the boss is wrong, and offer an idea on how something might get done better? Only an employee looking for trouble. Is there a way out? I believe there is, and it works for both government and business. Its something I call the performance preview. Instead of top-down reviews, both boss and subordinate are held responsible for setting goals and achieving results. No longer will only the subordinate be held accountable for the often arbitrary metrics that the boss creates. Instead, bosses are taught how to truly manage, and learn that its in their interest to listen to their subordinates to get the results the taxpayer is counting on. Instead of the bosses merely handing out As and Cs, they work to make sure everyone can earn an A. And the word goes out: No more after-the-fact disappointments. Tell me your problems as they happen; were in it together and its my job to ensure results. In fact, the police department in Madison, Wis., has used such a program since the late 1980s with considerable effectiveness. It replaced traditional performance evaluations with a system that emphasized goal-setting and continuous improvement. It encouraged supervisors to act as coaches and mentors, and officers (who are unionized) to offer feedback on their superiors. Employees are in fact eager for such collaboration. In Wisconsin, members of publicsector unions have been willing to give in on money (contributing more to their health care and pensions) but unwilling to give up their voice (the right to bargain collectively on work rules, not just wages). And public employees have a special relationship with the systems they serve. They are also taxpayers. Unions in Wisconsin are justified in worrying that limiting collective bargaining would lead to capricious firing or demotions, whether for age, personality, salary or any other criterion you can think of. There doesnt have to be anything malicious about it (although there might be). Its the inevitable result of giving the boss the subjective power to define and judge anothers performance. Performance reviews arent the only ways to measure effectiveness, to be sure. Workers whose output is tangible and measurable how much garbage is picked up, how many streets are cleared of snow are increasingly evaluated according to numerical goals. Id argue these measurements are similarly flawed. Workers are almost always better at

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coming up with metrics that lead to systemwide gains than bosses alone are. The key to systemwide success (as opposed to individual success) is still employees working together under the leadership of good managers. Of course, not every worker, public or private, will seize the opportunity to collaborate with managers and figure out ways to improve overall results. If they dont, there should be ways to get rid of them. But understand that the performance review makes it nearly impossible to have the kind of trusting relationships in the workplace that make improvement possible. With previews, at least, workers have the opportunity to reverse course and say how they can be their best. Taxpayers cant ask for more than that.
Samuel A. Culbert, a professor in the Anderson School of Management at the University of California, Los Angeles, is the author of Get Rid of the Performance Review! How Companies Can Stop Intimidating, Start Managing and Focus on What Really Matters.

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