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[image: Your daily Update] December 20th, 2011 Performance Reviews

Lose Steam -

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Work Reviews Losing Steam Some Companies Find New Ways to Motivate,

Exchange Feedback; A Few Scrap the Practice Altogether

By RACHEL EMMA

SILVERMAN<http://online.wsj.com/search/term.html?KEYWORDS=RACHEL+EMMA+SILVERMAN & \

bylinesearch=true>

It's that time of year again: Many workers and managers are preparing for

the dreaded performance review.

But some companies are deciding not to do them.

While most continue to perform the awkward rite of passage once or twice a

year, a few companies—about 1%—are scrapping the formality altogether,

according to the Corporate Executive Board. The thinking is that

performance reviews are angst-provoking and even ineffective in actually

motivating workers.

Some experts say scrapped performance reviews must be replaced with some

form of feedback.

Performance reviews have long received poor grades, even from those who

conduct them. Nearly 60% of human-resources executives graded their own

performance-management systems a C or below, according to a 2010 survey by

Sibson Consulting Inc. and WorldatWork, a professional association. And one

academic review of more than 600 employee-feedback studies found that

two-thirds of appraisals had zero or even negative effects on employee

performance after the feedback was given.

Last year, Atlassian Inc., a software company based in Sydney, Australia,

embarked on a publicly blogged experiment, still in place today, in which

it got rid of traditional performance reviews for its 450 workers.

Previously, employees were reviewed twice a year on a five-point scale,

plotted on a distribution curve, which determined workers' bonuses. But

" instead of discussion about how to enhance people's performance, the

reviews caused disruptions, anxiety and demotivated team members and

managers, " says Joris Luijke, the company's vice president of talent.

In place of reviews, the company asked managers and subordinates to discuss

performance and goals at pre-existing weekly one-on-one meetings. Feedback

now goes both ways.

As a springboard for discussion, participants, using an online app, are

asked to drag a dot along an axis to answer questions like, " How often have

you stretched yourself? " Instead of writing up lengthy assessments, they

note a few pointers on why they dragged the dot to a certain place.

The company also got rid of the distribution curve and individual

performance bonuses, instead giving everyone an 8% salary bump, as well as

group performance bonuses and stock options.

Traditional top-down performance reviews can also cause intimidation among

employees and make them fearful of acknowledging weaknesses, says A.

Culbert, a management professor at the University of California, Los

Angeles and co-author of the book " Get Rid of the Performance Review! "

Still, some experts caution that scrapped performance reviews must be

replaced with some form of feedback mechanism.

Without required, documented reviews, some employees may be able to slack

off without repercussion. Others may fail to be recognized for their

achievements.

Additionally, companies that bypass reviews say it places a lot of

responsibility on both managers and employees to have those difficult

conversations that can fall through the cracks when not mandated.

Other companies worry that failing to officially document performance can

pose problems if an employee is let go.

For the University of Wisconsin Credit Union, giving up performance reviews

didn't work. When the company eliminated formal reviews in the 1990s, it

didn't replace them with another clear-cut feedback system. " There was a

void, " says Lee Wiersma, chief human resources officer, who joined the

Madison, Wis., company in 2000.

Since then, the company has gradually instituted semiannual performance

reviews that are tied to pay and promotions. The performance criteria are

based on the requirements found in a job description, which are updated

regularly to stay current and realistic.

But other companies that have given up reviews have had more positive

experiences. A yet-to-be published study, by researchers Vicki M. Scherwin,

Jean-Francois Coget and Randall J. Kirner, examined 17 firms without formal

performance appraisal systems. Those organizations all reported low

turnover, high employee morale and strong relationships between managers

and employees, among other benefits, found the study.

When feedback is " not going to be used to judge you or your fate in the

company, you are more likely to be open about where you need to grow and

it's going to be far more effective, " says Dr. Coget of California

Polytechnic State University, San Obispo.

Glenroy Inc., a Menomonee Falls, Wis., packaging-film manufacturer with 178

employees, has successfully operated without formal performance reviews for

about 20 years.

" No one liked giving them. No one liked receiving them. We looked at each

other and said, 'Why are we doing this?' " says Seeger, Glenroy's

director of human resources.

Rich Buss, the company's president, acknowledges that the informal

appraisal system places a lot of responsibility on workers to be proactive

about offering advice.

But the company has implemented management training sessions to help

workers become more comfortable with giving and receiving feedback.

The company uses an outside salary consultant to determine pay based on the

duties of the job and years of service. If managers and employees think

they are ready for new responsibilities, workers are promoted to new

positions at higher pay.

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Quality indicators can harm the

elderly<http://ptmanagerblog.com/kevinmdcomquality-indicators-can-harm-the-eld>

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Quality indicators can harm the elderly

by Ken Covinsky, MD <http://www.kevinmd.com/blog/post-author/ken-covinsky>| in

Physician <http://www.kevinmd.com/blog/category/physician> | no responses

Quality indicators are used to measure the quality of health care delivered

to patients. Quality indicators are used extensively in the VA health

system, and efforts are underway in Medicare to tie reimbursement levels to

performance on quality indicators.

The motivations for using quality indicators are guided by the best of

intentions. There are many problems with the quality of health care in the

US, and quality indicators aim to improve this care. When put to their best

use, quality indicators can improve care.

However, a recent

commentary<http://jama.ama-assn.org/content/306/13/1481.extract> in

*JAMA* from our UCSF colleagues, geriatricians Sei Lee and Louise Walter

raise serious concerns about unintended harms from quality indicators. Lee

and Walter make a compelling arguement that quality indicators, when used

indiscriminantly, can actually harm the quality of care provided to the

older persons. This is particularly true for the most frail and vulnerable

elders.

How is it possible that something designed to improve care can actually be

dangerous to the patients they are supposed to help?

A key issue is that quality indicators almost always promote more medical

intervention and more medical intervention is not always better. This is

especially the case in frail older persons, where the risks of treatments

often exceeds the benefits.

Lee and Walter illustrates this problem with the HEDIS quality indicator

for hypertension. This indicator measures the proportion of patients with

high blood pressure who have a blood pressure of less then 140/90. In most

cases, this is a reasonable target. However, in some frail older patients,

the focus on blood pressure targets need to be balanced by concerns about

side effects. This includes sometimes debilitating orthostatic hypotension

(a drop in blood pressure when standing that can lead to dizziness and

falls) and side effects of adding additional medicines in a patient with an

already very full pillbox.

A doctor who decides it is in a frail older patient’s best interest to

allow the blood pressure to go over the HEDIS target will appear to be

providing poor quality of care. In contrast, a doctor who blindly aims for

the HEDIS target in all patients will look very good. Lee and Walter note

that HEDIS should balance its hypertension quality indicator by measuring

consequences of overtreatment like orthostatic hypotension and syncope.

Lee notes a similar problem with many quality indicators for glucose

control in patients with diabetes. Virtually all measure the proportion of

patients with glucose levels below a specified target. But virtually none

measure complications of aggressive blood sugar control like hypoglycemia.

This lack of balance can be dangerous in the older patient, in whom the

benefits of tight blood sugar control may be small, but the consequences of

hypoglycemia can be catastrophic.

Quality indicators, including HEDIS measures, have undoubtedly improved the

health of many patients. But the lack of balance in these measures has

likely harmed the health of some frail older patients. Quality indicators

need to balance their focus on more medical intervention by acknowledging

that more medical intervention is sometimes harmful.

It is time for the quality improvement community to start taking concerns

about potential downsides of quality indicators seriously.

*Ken Covinsky is Professor of Medicine, University of California, San

Francisco who blogs at *GeriPal <http://www.geripal.org/>*.*

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