Why performance reviews get a 'needs improvement'
It's that time again. The season of annual performance reviews is approaching. And if you're not stressing yet, the guy in the next cubicle probably is.
Performance reviews are one of the most dreaded and despised elements of corporate life. A recent survey of tech contractors found that performance reviews were among the least-missed part of 9-to-5 work, slightly less unpopular than commuting. Another measure of employees' evaluations of evaluations has fewer than half of them believing their reviews fairly reflect their performance.
It's not as if managers like them either. In a survey of human resources professionals, 73 percent said the top HR executive is the biggest champion of performance reviews. Just 30 percent said the chief executive was the major proponent.
Performance reviews "are dishonest, fraudulent, and bogus," said Samuel Culbert, a professor of management and organizations at UCLA's business school and the author of "Get Rid of the Performance Review: How Companies Can Stop Intimidating, Start Managing – and Focus on the Results That Really Matter."
(Read more: Get rid of the performance review)
The process "is not objective. It's one person's opinion about another person at a point in time." In addition, he says, performance reviews force employees to focus on currying favor with the boss, not on doing their best for the company.
Not only that, many companies require managers to rank employees, so that some portion of them get high marks while and others, inevitably, will get the opposite. That means that even in a team full of stellar performers, a significant share will be walking around with a ranking of average—or worse. And in a team where no one is working well, someone is going to look like a star.
The good news for employees and managers alike is that some companies are starting to move away from traditional types of performance reviews.
(Read more: The problem with performance reviews)
Microsoft, for one, has long used a review system that grades on a curve, calling it a stack ranking. But on Tuesday, Lisa Brummel, the human resources chief, announced in a letter to employees that there will be "no more ratings," and no curve.
Culbert argues that a better system—for Microsoft and others—would be one where employees and their managers just have an ongoing conversation about what's working and what isn't. "People ought to know what's perceived about them real time, and have an opportunity to fix it or change somebody's misimpressions."
Starbucks is starting to move toward that kind of system, according to Culbert, who has worked with the company on the issue for several years.
A Starbucks spokeswoman, Laurel Harper, said no final decisions have been made.
Changing attitudes in large organizations is never easy. But Culbert is optimistic that the performance review as we know it may eventually fade away. "This marching army has steam that's not going to be stopped."
—By CNBC's Kelley Holland. Follow her on Twitter