(CNN) -- Call them what you want -- annual performance reviews, evaluations or appraisals -- employers and employees alike loathe them.
"It's a structured, forced process," says Mary Jenkins, a Michigan business consultant who, along with Tom Coens, a labor and employment law attorney and organizational trainer, has written "Abolishing Performance Appraisals" (Berrett-Koehler Publishers, 2000).
About 80 percent of companies in the United States use annual performance reviews of some kind. Yet 85 percent of these firms are dissatisfied with employee appraisals, according to Jenkins. "Appraisals are redesigned every three to five years," she says.
They're no picnic, either, for those whose work is being appraised. Jenkins contends that 80 percent of workers surveyed say they think they're in the top 25 percent of their company's contributors -- meaning the top performers. And 98 percent say they believe they're in the top 50 percent.
"Mathematically," reasons Jenkins, "the probability is that many people are going to be evaluated lower than what they think they are. Employers usually end up with employees who feel it's unfair and frustrating. So what's intended to be motivating can often be de-motivating."
In all fairness, it must be said that companies keep giving employee appraisals because they hope to give and receive feedback; help employees develop and grow; and have an objective means to make pay and promotion decisions. And appraisal is a way of documenting the company's position in the event that a worker is fired.
Traditional methods of appraising employees fail, however, in part because so much of great importance is invested in them, Jenkins says.
"One of the reasons we may have difficulty even absorbing the feedback is that we're very attentive to what the implications are for our pay and future opportunities and who else might see this. We're trying to do too many important functions with one process. It has the allure of being objective, but in reality it isn't."
Employee appraisals are rife with problems, but here are just two, as Jenkins sees it.
"In conventional reviews, managers are apt to be more lenient," she says.
"I think subconsciously they're aware that if they rate someone working for them lower than what they're up for, they'll de-motivate that person and that will have an effect on their productivity," Jenkins says. In other words, these managers, when appraising workers, are giving new meaning to the term "false positive."
At companies where there's a peer-review process in place, "your natural inclination is to find out more about it," Jenkins says. Especially if the appraisal includes criticism.
"You're wondering who said that; why would they say that? What you're seeking is, 'Does the person who said this know what they're talking about?'"
It goes to the accuser's credibility. And, unlike the setting of a court of law, the accused has no right to face his or her accuser.
There's a better way to do employee appraisals, Jenkins says. Abolish them. It's already being done successfully by smaller companies, she says. Those that have done so focus on the company's processes and systems, she adds.
As way of example, Jenkins notes that some hotels used to be concerned about the wait time their customers had on checking out. "We could either keep badgering the people handling those checkouts to work faster, or we could look at the process and see if there's a way to streamline it," she says.
That's what happened, of course. "By looking at the process, that's how we came up with electronic checkout. Now you can check out without even going to the front desk.
"You have to have a fundamental belief that 95 percent of the people who work in your organization are good people, and that they want to do a good job. So if results are suffering, your reflexive response should be to look where in the organization is this breaking down instead of who did it. Looking at the process and how the work is generated."
When workers don't perceive employee appraisals as a blame game, they are more receptive to the suggestions they receive, Jenkins maintains. "If feedback is to be meaningful, then we need to respect the feedback source of their credibility, and we have to believe they have our best interests at heart. If we don't believe that, we tend to disregard the feedback."
Rather than an annual review, Jenkins advocates ongoing dialogue between managers and workers throughout the year. With annual appraisals, workers assume it's the boss' job to give feedback, she says. "It's an unintended consequence of that process."
Periodic conversations about job performance eliminate this and the tensions and defensiveness that often accompany annual reviews, she says. "It's so much less laden with anxiety than this once-a-year event," she says.
Ideally, managers should initiate these periodic conversations, but if they don't, employees need to be proactive, Jenkins says. And companies need to make it known that their feedback is welcome, she adds.
All this is not to say that managers shouldn't counsel employees who aren't meeting expectations. They should, Jenkins says, and they should do so in writing -- in order to protect the company if the situation is serious and may be subject to a legal challenge.
Smaller companies already are beginning to banish employee appraisals, Jenkins says. "The Fortune 50 will be the last to move in this direction," she predicts.
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