Four Steps To Fix The Broken Employee Review System

Your boss doesn’t like it any better than you do.

Stephen A. Ingalls

Guy Hatch

February 13, 2020

It’s October, and if your business works on a calendar year cycle, it’s time. Your boss seems a bit busier than normal. Maybe even a little stressed. More time behind closed doors in the office. Lots of “Hey, let’s get these done before the end of the month” shouts down the hallway. Then, you realize. You remember what all this kerfuffle is about. It’s time for performance reviews and you immediately get a little sick to your stomach.

You recall a discussion with some consultants on the subject. “Only 2 in 10 employees strongly agree that their performance is managed in a way that motivates them to do outstanding work.” Only “29 percent of employees strongly agree that the performance reviews they receive are fair, and 26 percent strongly agree they are accurate” (Gallup, 2017). Well, that’s not good.

But if it’s any consolation, your boss doesn’t like it any better than you do. “More than 90 percent of managers, employees, and human resource (HR) heads feel that their performance management processes fail to deliver the results they expected, and many view their current processes as ineffective and/or inaccurate (Corporate Leadership Council, 2012).” Wow.

If that weren’t bad enough, that same 2012 report suggests that “managers and employees spend about 210 and 40 hours, respectively, per year on performance appraisal and performance management activities.” I’d like to have that time back.

If Broken, Why Use It?

It’s a debate raging throughout business and a question leaders are asking themselves, “If this system is as broken as it seems to be, why don’t we abandon it all together and get some of that time back?” We have enough to do.

And this is precisely what a number of big organizations have chosen to do, including Eli Lilly, Adobe, and Gap, Inc. So why are we still doing this? Sounds like they might be on to something.

Not so fast.

Even without a formal system, organizations will continue to assess and rank employees, but now with a less structured, more intuition-based approach. How will my organization determine compensation levels when “over 90 percent of companies tie pay to performance” and “82 percent link individual performance to compensation (Mercer, 2013).” Are they just going to wing it?

Most businesses we encounter conduct some form of annual evaluation and link pay to review outcomes. But, only around 5 percent of those organizations feel like they have the system right – that the system fulfills its purpose and guides individuals along a growth path.

So – review systems appear broken and we spend significant manpower on their management. Yet, we need them. What should we do?

Focus Your Energies

We believe there are four areas where organizations should apply some energies to get a better return on that 210-hour annual investment.


Make the review mirror those competencies your organization needs to nurture and reward. All too often, we find review templates that have been pulled from some HR software system or brought along from a former organization. Stop it.

Your organization’s culture exercises a specific brand of leadership. You grow leaders in a way that’s unique from every other organization on the planet. Think through those competencies (your leadership brand) and what’s required to: 

  • get in the door,
  • be a successful employee,
  • stand out among your peers for recognition and promotion (informal leadership), and
  • formally execute leadership and management responsibilities from the most junior to your executives.

Your performance review system should mirror that brand.


The performance review system should tie directly to individual development plans (and those should tie to your organization’s succession plan). In those organizations we work with, we also find weak or overly standardized individual development plans (IDP). In fact, organizations openly struggle with performance reviews for long-standing, stable employees. “What do I say this year that I didn’t say last year?” Reviews, year-to-year, aren’t much beyond a cut and paste exercise. Struggling with engagement much?

Remember, of all the pros and cons around performance reviews, this is the one time annually (or more frequently if you’re lucky) that you and your boss are supposed to have a one-on-one discussion about how you’re doing and what’s next. If that conversation has gotten stale, so have you.

The templates our IDPs come in should be common, but what’s in that document should be uniquely tailored to your progression – from wherever you are to wherever the organization is growing you to be. Even if you’ve plateaued, position-wise, at work, the IDP can speak to self-development, time management, emotional intelligence, or communications goals. We all need work there.

But even better, that progression we’re talking about should link directly to your organization’s succession plan – and we’re not talking about what happens if the boss gets hit by a bus. Rather, your business’ succession and performance management should encompass a wider group of employees at various seniority levels who represent “single points of human failure.” Where there’s a plan for everyone’s succession (read growth) in your organization, you have the makings of a tailored IDP which becomes that thing on which your performance review is based.


Teach your leaders to counsel and coach. When we promote someone to a formal leadership position and make them responsible for developing others, they all too often receive a “get out there and coach ‘em up” admonition from the boss. Boo.

Frankly, if that’s how you’re developing subordinate leaders to review performance and offer feedback, your system is going to continue to struggle. Spend the time teaching them what, when, where, and how to do this right – your way. Your employees will be better, they’ll be better, and the system becomes worth your time again.


Lastly, regularly check on how recurring performance reviews and the IDP is being managed. Quarterly updates to augment the annual, formal review? Sure. I’ll bet they aren’t happening as regularly as you think they are, and if they’re not – you’re violating a cardinal rule for reviews – never, ever surprise anyone.

We know. There are no lightning bolts here. Good, old-fashioned, common sense leadership. But you know what they say about common sense – it’s not so common. Want some help? It’s out there.

Stephen A. Ingalls is president and CEO and Guy Hatch is director of business development at Catalyzer, which specializes in leadership development. More information is available at

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