5 Things to Know About Year-End Performance Reviews

It’s the end of the year, and that can only mean one thing: that mysterious ritual known as the annual performance review. If you’re like most employees, you have little idea how this most corporate of corporate practices really works, or how managers come up with performance ratings.

And based on the results of a recent study published in the Academy of Management Discoveries, it’s easy to see why you might feel confused. Researchers found that the performance ratings assigned by university managers didn’t reflect their employees’ actual work. Moreover, the bosses differed in how they judged the objectivity and fairness of performance reviews.

To help you survive this annual ritual (and even come out on top), let’s take a behind-the-scenes look at some of the things you may not know about performance reviews.

Ratings are Largely Based on Opinions, Not Facts

Don’t take it personally if you receive a bad rating, advised Samuel Culbert, professor at UCLA’s Anderson School of Management and author of “Good People, Bad Managers: How Work Culture Corrupts Good Intentions.”

“Most ratings aren’t objective or based on facts; they’re subjective,” Culbert said. “The rating reflects the manager’s view of your performance and how effective you were at pleasing him or her.”

Another manager may have a completely different opinion of your performance, he added. For instance, one manager may view an employee as a great team player, while another might see that same worker as a conflict-avoider unable to take the initiative.

As Culbert pointed out, even a negative review can sometimes prove beneficial: Receiving candid feedback may help you understand your manager’s perspective of your performance—as well as the pressures he or she is facing.

“It’s a Rorschach card for internal politics,” Culbert said. But generally speaking, if your manager doesn’t like you or your work, it might be time to explore other opportunities.

Be Aware of Stack Rankings

Did you know that it’s possible to receive an “exceeds expectations” evaluation and still be ranked below your peers? This situation can happen if you work for a company that forces managers to stack rank their employees using a bell curve (which is also known as forced distribution of performance ratings).

“The comparison is relative,” explained Dick Grote, an authority on performance management and president of Grote Consulting Group.

If you’re surrounded by “rock stars,” you may end up near the bottom of the rankings, which could impact your bonus or raise (and the projects you get to work on). Alternatively, if your entire team didn’t meet its goals, you could get a so-so review but still end up near the top of the rankings.

In some companies, managers get together behind closed doors with the goal of allocating rankings to employees across multiple departments. The bottom line is that your ranking (and raise) may hinge on your manager’s persuasiveness and willingness to go to bat for you, no matter how good (or bad) your performance. It’s simply out of your control.

Peer Feedback May Factor In

In some companies, peer reviews or evaluations may play a role in your performance grade. (Google, Amazon and Uber are examples of companies that have used peer reviews in the past.)

Exhibit caution when sharing negative feedback about a colleague; there’s no guarantee that your comments will remain confidential. “Don’t get sucked into providing ‘anonymous’ feedback,” Culbert warned. “Only share positives if you’re asked about a teammate’s performance.”

Expect Disagreements

If you’ve disagreed with your manager’s assessment of your work in the past, you’re not alone. According to a 2013 study, less than half of employees believed that their manager’s appraisal accurately represented their work.

“The difference in opinions is largely due to the fact that individuals are notoriously inaccurate in assessing the quality of their own performance,” Grote said.

If you’re asked to write a self-appraisal, ask your boss how he or she will use the information; that may influence what you write or the tone you use.

In most cases, it is best to emphasize your achievements. Frame your mistakes or shortcomings in a positive way by focusing on what you’ve learned, and what you will do going forward. Just make sure that you don’t give your boss “the noose with which to hang you.”

Think Twice Before Challenging a Negative Review

Unless your rating is based on factually inaccurate data, challenging an unfavorable performance review may do more harm than good. Sleep on your boss’s decision, and consider that even a critical review may be right about you in some ways.

Most of all, don’t take harsh criticism to heart. Remember that your manager’s opinions are just that – opinions.

4 Responses to “5 Things to Know About Year-End Performance Reviews”

  1. I’ve seen all sorts of performance reviews over the years. The best ones are quick and easy and demonstrate a great rapport between the manager and employee. The worse, when an employee is not recognized for the value he/she brings to the table. In the latter case, nothing you do is going to improve the result – time to move on and find a job where your special skills are appreciated.

    • I agree with your comments.
      What I cant stand is this:
      I like my job and it’s responsibilities and independence (IT Director for a medium size company, but my role involves programming, infrastructure and support as well).
      Ownership and upper tier management all say they couldn’t live without me and are thrilled with the job I do both technically as well as work relationship with clients and employees and work ethic.
      Yet, when it comes to bonus time it’s all based on how 1 person “feels” everyone should be compensated. He can only relate to 1 segment of the company doing what he used to do. He also chooses to favor his son and his buddies. My worth is immense if you base it on my contributions, dedication and skill set I bring yet I get put in the medium range because he wants to get more to those he likes. I’ve tried making connections with him so he’d feel more personal about me but that doesn’t work. The one person (the guy I directly report to. I should report to the head guy but he would have me changing direction constantly so I requested a reporting change but not an organizational one) could stand in for me but he is being bought out by getting bigger bonuses himself. It makes one feel underappreciated, un-respected. What is really frustrating is he pretends I’m getting the top end, even though I know better (because of working closely with payroll. I’d never say anything but ya see what ya see…)
      I try not to let it get to me, but it is but one of many a frustrating aspect of a smaller company.

  2. Stacked ranking, toteming — those were the days. Retired now. Yeah, employee evaluations reminded me of dog shows — that’s how objective they were — different people doing different type work but somehow management knew how sort them into a relative ranking. The best part of stacked ranking, of course, was the ‘quota system’ — thall shalt find 8 or 10% to be underperformers and unworthy of raises or bonuses. Funny how many people with gray hair suddenly fit that category. Age discrimination much? Tailor made for it.