Companies like Microsoft say most of their employees were A-students all their lives. But its performance review curve of 1 through 5, resulted in low morale when most staffers got a 3.
Today, Microsoft has replaced annual ratings with coaching and regular meetings with managers. They say it has reduced the obsession with ratings.
Research confirms their results.
In a 2014 paper in the journal Strategy + Business researchers at the Neuro Leadership Institute concluded that the act of giving a rating jolts employees into a "fight or flight' scenario.
The study found that half the employees who were reviewed thought their rating should be higher and of that number, 90 percent were unhappy. Those unhappy workers had a 23 percent drop in collaboration and innovation.
At Cigna Corp., the company dropped its old performance review system when they saw it was taking a big toll on morale. Staffers were fighting to prove they deserved the best grade, which only a certain number could attain, and they were very disappointed when they got lower ones, according to The Wall Street Journal.
Some keep the review,
but refine the method
Paul Rubenstein of benefits consulting firm Aon Hewitt says some companies are keeping the assessments but also include conversations managers must have with employees about how they can do better or work better with others.
