I think a big reason is we hate them. So many of us see them as a time-wasting, burdensome process, full of inaccurate measures of performance - which often result in demotivating staff. At least this is what I often hear.
I've heard start-ups just shouldn't do them. They take away the zest, the common drive start-up employees already have, and... the laissez faire, independent, hard work ethic attitude. Reviews are part of 'the system', 'the man', another useless process which is exactly why your employee left their last job.
Well wow ... there it is out in the open. I do admit - a review free, no BS, garden of Eden work environment sounds pretty sweet. We can just work hard, talk to each other everyday about performance and tasks, and give high-fives and recognition at-will (read with sarcasm).
The problem is you don't communicate as well as you think you do. Employees need more.
A recent New York Times article on reviews focused on the inability of reviews to improve company performance. While ditching reviews because off a weak link to improved performance is reasonable, I'd argue we should do reviews for other reasons.
- Employees are NOT motivated by money alone. Often, they are not even primarily motivated by money. They want to be engaged and to contribute to something bigger.
- Employees want to hear you know what they are working on. They like being acknowledged. I mean, come on - even if you everyone knows the website was released and looks sharp (for example), wouldn't you want your boss to sit down and SAY you did great, you met the deadline, you faced some technological challenges and went out of the box to solve them? Perhaps you even get it in writing?
- Employees want feedback about their job. They want accurate feedback. (Of course, I can't find the link now, but I saw a study showing a majority of employees feel they do not get accurate feedback about their work performance - and that accurate feedback is top factor in job retention).
- It is a good idea to be forced to set goals and to hand out acknowledgments and kudos.
- Employees have good stuff to say that you don't know about. Despite how much you think you are approachable and 'talk with your team everyday', there generally isn't a good time to talk about the TPS reports, the co-worker they are having difficulty working with, or how they wish they could be doing a different job.
- We need more specific times to force you and employees to ruminate over performance. Just thinking about the year, thinking about what your subordinate (or your boss) might say, thinking about what you want, and what you want to say 'thank you' for (or what you should say 'thank you' for) is a good process.
- You don't want to encourage the whole year being open to salary scrutiny. It's nice to have a designated time allotted to discuss increases and adjustments. Create that time.
- Of course, reviews serve a very real world purpose of documentation - justifying a promotion or termination of one employee over an other. You never care about these until it is too late - so take care of your legal obligations.
I guess in short, if you are doing 'boring' reviews you need to improve them. If you don't do them, you need to start.