They're baack...

Yikes! It's that time of year again when we work our way through the annual performance review.

Here it comes again.

That time of the year that most employees enjoy about as a much as a flat tire.

And it's not much fun for the boss, either.

Performance reviews.

And just about everybody has a horror story to tell - the supervisor who doesn't do them at all, the manager who confuses you with someone else, the boss who recycles last year's reviews - hoping no one will notice.

In fact, performance reviews can be so troublesome that some businesses ditch them altogether.

Yet as companies look for new ways to motivate and retain top talent, a growing number of firms are reexamining their annual review process - a process nearly everyone agrees is both important and imperfect.

"The performance appraisal is the single-most powerful tool an organization has to influence the performance of employees," says Dick Grote, a performance-management consultant in Dallas. "At the same time, it is the most scorned, reviled, disparaged tool in the entire management tool kit."

Nearly every major survey on the top-ic draws the same conclusion: Everyone dislikes them.

A 1997 survey by Aon Consulting of more than 1,700 human-resource professionals found only 5 percent "very satisfied" with their review process.

The idea sounds fine: examine an employees' progress, strengths, and weaknesses to help them improve performance. Employees should also set goals and understand how they fit into the company's overall business plan.

The reality is often a process hampered by politics, with little value to workers.

One manager, required to maintain a quota of negative and positive reviews, told one employee, "It's your turn in the barrel, but you'll be taken care of next year," recalls Ed Bancroft, head of William M. Mercer's Midwest performance and rewards practice.

At a recent seminar led by Shelley Riebel, a human-resources consultant in Armada, Mich., "some participants claimed their review was exactly the same as the previous year, only the date was whited out."

Another worker compared his review with his co-workers and the comments were the same.

"The worst thing a supervisor can do is communicate that this is not an important process," Ms. Riebel says. "If a supervisor really believes that, then don't do the review because it won't be sincere."

And many don't.

Indeed, the biggest challenge companies face is getting managers to do appraisals at all.

No doubt downsizing has left many supervisors overseeing larger departments, and that means more people to review.

At the same time, workers are changing jobs more often. Many don't even stick around for a year. And that has managers saying, "Why bother?"

"You do a performance review and in three months the person leaves. Your incentive to do a thorough job is fairly low," says Marilyn Moats Kennedy, a career counselor in Wilmette, Ill.

"One of the things that has devalued performance appraisals is that you can get another job fairly quickly," Ms. Kennedy adds.

Another big problem is honesty - your boss calls you a star and two weeks later gives you a pink slip.

"For many people it's a lack of wanting to have a conflict issue, and I can't blame them," says Holly Culhane, who owns PAS Associates, a human-resources consulting firm in Bakersfield, Calif.

"But people cannot improve if they don't know how they aren't performing well," she says.

Part of the problem is that managers don't prepare for the review. They haven't confronted employees about problems early on, and they haven't documented those instances.

Most consultants agree that formal written reviews should take place every six months.

"People want to stone me when I tell them quarterly," Ms. Culhane says. "But you can get [reviews] down to a science."

A year and a half ago, Wellhead Inc. in Bakersfield, Calif., revamped its performance-evaluation procedure.

The manufacturer of oil-well equipment now does formal reviews of its 82 employees every six months rather than once a year.

It also revised its evaluation form, adding a goals section and clarifying the evaluation points.

"The frequency is what I see being positive," says Alinha Duhn, an administrative manager. "A lot of times the employees don't hear the things that need to be adjusted until it's too late."

"Now, they're coming in with ideas of what they want to achieve."

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