Performance evaluation will not die, but it should

A wide range of systems for evaluating performance have been used in organisations, ranging from traditional annual performance appraisals to performance management systems built around informal, real-time evaluations, and these systems almost always fail. Rather than continuing to make cosmetic adjustments to this system, organisations should consider dropping the practice of regularly evaluating the performance of each of their employees, focusing rather on the small subset of situations in which evaluations of performance and performance feedback are actually useful. Four barriers to successful performance evaluation are reviewed: (a) the distribution of performance, (b) the continuing failure to devise reliable and valid methods for obtaining judgments about performance, (c) the limited utility of performance feedback to employees, and (d) the limited utility of performance evaluations to organisations. In this paper, I propose ways of managing performance without relying on regular performance evaluation, refocusing managers' activities from performance management to performance leadership.