Yes, performance reviews create problems, according to a recent Harvard Business School article, but they're not so terrible when you consider all the other alternatives: https://hbr.org/2016/11/lets-not-kill-performance-evaluations-yet.
And a recent survey of 9,000 global managers revealed that not having performance reviews was worse than other systems.
My experience would confirm that we shouldn't throw out the baby with the bathwater. The reality is, even if you don't have formal performance reviews, organizations need to have some kind of rating system. If that system is not accomplished through a performance review, there's likely to be a lack of transparency. Nothing kills employee engagement faster than not knowing what's going on -- especially when it comes to their own salary, bonus or career development.
"Nothing kills employee engagement faster than
not knowing what's going on -
especially when it comes to their own salary,
bonus or career development."
While other systems encourage constant feedback, my experience is that busy leaders are unlikely to provide feedback in a useful way, and that they won't manage to give it consistently. Different employee groups will inevitably receive different rates of feedback from managers, increasing concerns about fairness.
And then, of course, there's the pesky matter of documentation, an exercise that your attorneys may nag you about but that is also a necessary evil so that you have a place to sort out your thoughts, as well as to remember what happened.
