I am engaged in a LinkedIn discussion on the annual performance review. The question under discussion asks "What would make the annual performance review superfluous?"
The two issues that are getting the bulk of the attention in the discussion are: the frequency of the feedback (and the recommendation is you do more of it); and the notion that the person giving the feedback isn't well trained or using a particular appraisal methodology, (the recommendation is that you use some particular methodology for the appraisal, and that you do it more frequently).
The most interesting thing that emerges from the discussion is how locked-in participants are to the notion that a manager to subordinate performance evaluation should be done at all. They are locked-in that a performance appraisal must be done, and that its the manager’s job to do it.
Many people who go into HR have a psychology background. The manager-authored performance reviews present an obvious psychological flaw that is being ignored. Experimental psychologist have shown us time and again that “Managers get the performance they expect.” Thus, when a manager writes a performance appraisal they are simply telling us what performance they expected. Their appraisal is right, of course, the performance typically is as they describe it. But the studies show that an employee’s performance is largely determined by the predisposition of the manager (see http://greatmanager.ucsf.edu/files/Leadership&Expectations_PygmalionEffects.pdf).
As weird as this sounds, if you want your company to perform well, convince your managers that their subordinates are extraordinary performers and that’s what you’ll get. It also helps a great deal to convince the employees as well that they are great performers. We have some marvelous examples that show this works!