The History of Performance Reviews and the Future of Employee Evaluations

For years, employees have always grimaced at the thought of yearly performance reviews. We are judged for a year’s worth of work in a one-hour sitting, where we receive feedback based on what was documented or remembered by our manager. Seems kind of archaic, right? Well, that’s because it sort of is.

We found a great infographic by WorkSimple that details the history of the performance review and its archaic ways. Some interesting facts from the infographic tell us:

• It wasn’t until the 1900s that employers started making the correlation between worker satisfaction and greater work productivity.
• In the 1920s, Elton Mayo, the Father of Human Resources, measured the relationship between productivity and the work environment. As a result of the Great Depression, pensions, labor standards and minimum wages were instituted.
• Mayo’s work helped change the treatment of employees in the 1940s, where managers started acting more like leaders instead of taskmasters.
• The government chimed in about worker satisfaction in the 1950s with the Performance Rating Act (Outstanding, Satisfactory and Unsatisfactory) and the Incentive Awards Act, where government employees could be rewards for good work with cash and recognition.
• Pay for performance was introduced in the 1960s, but personable managers continued to evolve.
• The term “performance management” was coined by Aubrey Daniels in the 1970s.
• The 1980s brought about MBO, or management by objectives.
• In the 1990s, a Society for Human Resource Management survey shows that only 5% of companies were very satisfied with their performance review process.
• Finally, in the 2000s, performance management came online, which created its own set of problems.

The reality is that today’s workplace is changing and performance reviews won’t keep up or be effective. Many companies allow employees to work remotely, and more employees want weekly or even daily feedback so that they can hone their skills.

Instead of keeping the annual performance review, think about the viability of creating a yearlong, effective employee evaluation program that allows managers, employees and peers to provide constructive feedback on regular basis. An effective employee evaluation program lets you invest in your employees so that you can build loyalty, drive efficiency and create opportunities for improvement.