Performance reviews are a habitual part of any company's year — but has this annual routine evolved alongside the workforce in the last century?
If you ask Joshua Merrill, CEO of performance review platform Confirm, the answer is a resounding no. In fact, performance appraisals can be traced back to Walter D. Scott, who owned a consulting firm in Australia. He introduced the concept of rating the abilities of his staff as early as World War I. However, in a professional world of rigid hierarchy and
"A lot of the problems that we see today in performance reviews are a result of extending this original model far beyond what it was designed to accomplish," he says. "If we use a performance review process that is 100 years old to evaluate knowledge workers, it just doesn't work."
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The model especially doesn't work for talent with visible distinctions from their white, cis-male and able-bodied peers. Since traditional performance reviews often hinge on a singular manager's perception of an employee's abilities, unconscious bias can easily contribute to the review's outcome. Merrill points to the New York Times as one of the latest examples of this.
While racial discrimination can often be a major source of disparities in performance reviews, Merrill notes that something as simple as recency bias — an emphasis placed on one's latest memories of the person they are reviewing — can get in the way of well-rounded reviews.
"We are all primed to look for certain behaviors or characteristics based on our own personal backgrounds and experiences," says Merrill. "That inevitably creates bias to varying degrees."
If employers are looking for short-term fixes, Merrill first suggests combining demographic data with performance ratings to see if certain groups are consistently scored higher or lower than company averages. Managers can also reduce the number of free-form responses on self-evalutations and instead keep to a unified rating system.
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"The more open-ended a question is, the more opportunity there is for the idiosyncrasies of the reader to be a factor in how somebody's evaluated," says Merrill.
Additionally, managers should have a consistent set of expectations, or grading rubric, that is uniquely relevant to their team. However, Merrill views these adjustments as patching holes in an inherently flawed model. His ultimate goal for every company is to help them switch to an organizational network analysis model (ONA).
ONA measures and graphs patterns of collaboration within a company, examining the frequency and nature of interactions between all employees.
"It's the closest methodology that I've ever seen that mirrors the way people actually get things done, which is in networks — not hierarchies," says Merrill. "Today, we work super cross-functionally. A review isn't about making the fewest mistakes, but maximizing our impact as individuals."
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And that impact may be better measured by how employees connect with one another to produce results. For example, a mid-level manager may be critical to the flow of information, acting as the point of contact between the product division and the rest of the company. ONA can track which teams and individual employees connect to that manager, and see which teams may be isolated altogether.
It's a data-driven model, using information from collaboration tools, emails, employee surveys, and feedback forms to build an analysis. Notably, employers will have to receive employee consent to share this information with whichever software they picked to create an ONA. Ultimately, updating performance reviews will take company-wide commitment.
Although Merrill admits to understanding why employers may be hesitant to suddenly switch to ONA-based performance reviews, he still believes that change is inevitable. He advises employers to not fall behind.
"We need a new model for how people are evaluated because the manager review is deeply flawed," says Merrill. "In five to 10 years, [ONA] is going to be the standard for how performance reviews are done."
