Performance evaluation will not die, but it should

• DOI: http://doi.org/10.1111/1748-8583.12259
• Date: 01 January 2020
• Author: Kevin R. Murphy
• Published date: 01 January 2020

Performance evaluation will not die, but it should

Kevin R. Murphy

Department of Work and Employment

Studies, University of Limerick, Ireland

Correspondence

Kevin Murphy, Department of Work and

Employment Studies, University of Limerick,

Plassey Road, Castletroy, Limerick, Ireland.

Email: kevin.r.murphy@ul.ie

Abstract

A wide range of systems for evaluating performance have

been used in organisations, ranging from traditional annual

performance appraisals to performance management

systems built around informal, real-time evaluations, and

these systems almost always fail. Rather than continuing to

make cosmetic adjustments to this system, organisations

should consider dropping the practice of regularly evaluating

the performance of each of their employees, focusing rather

on the small subset of situations in which evaluations of per-

formance and performance feedback are actually useful.

Four barriers to successful performance evaluation are

reviewed: (a) the distribution of performance, (b) the con-

tinuing failure to devise reliable and valid methods for

obtaining judgments about performance, (c) the limited

utility of performance feedback to employees, and (d) the

limited utility of performance evaluations to organisations.

In this paper, I propose ways of managing performance

without relying on regular performance evaluation,

refocusing managers' activities from performance manage-

ment to performance leadership.

KEYWORDS

HR function, human resource management, human resource

strategy, performance management, performance related pay,

supervisor

1|INTRODUCTION

Organisations use a range of systems to evaluate, manage, reward, and direct the job performance of their

employees. These often take the form of formal performance appraisal systems, which include annual reviews of

Received: 26 December 2018 Revised: 6 August 2019 Accepted: 11 August 2019

DOI: 10.1111/1748-8583.12259

wileyonlinelibrary.com/journal/hrmj © 2019 John Wiley & Sons Ltd 13

Hum Resour Manag J. 2020;30:13–31.

PROVOCATION PAPER

employee performance, formal feedback sessions or appraisal interviews, efforts to calibrate evaluations across

departments or divisions, and the use of appraisals to drive key human resource management decisions, such as

salary increases, training, or even the separation of poor performers (Murphy, Cleveland, & Hanscom, 2018, pro-

vide the most recent review of research on performance appraisal). Some appraisal systems are built to motivate

future performance, by linking evaluations of performance with valued rewards, whereas others are designed to

identify poor performers and either correct their performance or separate them from the organisation (Murphy &

Cleveland, 1995; Welch & Byrne, 2001). Other organisations employ performance management systems that are

built to align the performance goals and activities of employees, work groups, departments, and divisions with

the broad strategic goals of the organisation and support employees in executing the plans and strategies that

are used to achieve unit goals (Aguinis, 2013; Pulakos, Mueller-Hanson, Arad, & Moye, 2015; Pulakos & O'Leary,

2011). Performance management systems are sometimes built around traditional performance appraisal methods

(e.g., annual evaluations of performance, see Pulakos et al., 2015), but increasingly these systems are built around

more streamlined and informal evaluations, focusing on real-time feedback rather than annual summaries of

performance (Aguinis, 2013).

Regardless of how they are designed or configured, performance appraisal and performance management sys-

tems are almost always rated as failures by both employees and management (Adler et al., 2016; Murphy et al., 2018;

Pulakos et al., 2015). In this paper, I will argue that there is a common feature in virtually all performance appraisal

and performance management systems that contributes substantially to their failure—that is, they are built around

subjective evaluations of job performance (Murphy et al., 2018).

The central thesis of this article is that the process of performance evaluation in organisations is

fundamentally flawed, regardless of the specific form performance evaluation systems take and that radical

changes are called for in organisational systems that depend upon these evaluations. That is, I call for the

development of performance management systems in organisations in which the supervisor's judgment about the

adequacy or the level of each employee's performance is not sought or conveyed to every employee on a

regular basis.

It is useful to define precisely what I mean by “performance evaluation.”Performance evaluation is a process in

which one of more individuals in organisations (typically supervisors) observe and obtain information about the job

performance and effectiveness of individual employees. They use this information to make subjective, evaluative

judgements about the performance of individuals. The term “subjective”is used in the same sense as in Landy and

Farr (1983)—that is, an evaluation is subjective if it requires judgment and cannot be arrived at by a simple objective

count. “Subjective”does not imply that these judgments are biased or inaccurate, simply that they are not subject to

external objective verification. This lack of external verifiability, however, does leave evaluations of job performance

open to doubt and challenge. The term “evaluative”means that judgments about performance can be scaled on a

negative to positive continuum. That is, performance might be described as poor versus good or as unacceptable

versus acceptable; performance evaluations are ultimately statements about the value the evaluator places on the

employee's performance. Regardless of the specific form performance appraisal or performance management

systems take, all of these systems rely on evaluative judgments about the performance and effectiveness of

employees, and that is their Achilles heel.

This paper is divided in to two major sections. First, I document the persistent failure of performance appraisal

and performance management systems in organisations and the lack of effective responses to these failures. The sec-

ond section of this paper I take up the question of whether we should evaluate performance, and I show both why

this process is so challenging and why organisations obtain so few benefits and incur so many costs in attempting to

evaluate job performance. I offer the potentially radical suggestion that organisations should abandon the whole con-

cept of regularly evaluating the performance of each employee; I end this paper by describing potential replacements

for performance evaluation.

MURPHY

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