For decades the time-honored, ratings-based annual performance review has been the standard for evaluating employee performance. Managers and employees set up goals to be met for the year, then twelve months later, discuss whether or not those goals have been met, what improvements could be made and a rating is affixed which ties to compensation and possibly a promotion or bonus.
But, one big problem with this system is that it’s the same system used as far back as the industrial age. Back then a good job was defined as one that met spec, was on time and on budget. The value of personal performance and development were lacking. This is a system focused more on performance than the person. It’s not aligned with the ways we work today, nor with what motivates the modern employee or drives innovation. The big question is “Why do we continue to use the same outdated system?”