The President’s Birmingham Post Legal Column

Birmingham Post Legal Column
12 October 2015
by Mushtaq Khan, President

“Because that’s how we’ve always done it.”

How many times have we heard this? Just because it’s common practice, could it also be a common mistake too?

Take the annual performance review/appraisal. Many law firms/businesses consider it a pillar of best practice, however the evidence may be pointing in a different direction. Study after study shows that traditional annual performance reviews can have a negative impact on staff-manager relationships. One study found that individual appraisals were detrimental to staff performance in more than one out of three instances.

Studies have shown that both staff and managers dislike annual performance reviews/appraisals. If not done properly, they can be a waste of time, resources, money and a wasted opportunity.

The consulting firm Accenture has eliminated annual performance reviews, which chief executive officer Pierre Nanterme said are “too costly” and don’t achieve the goal of driving better performance. Companies including Microsoft and Gap have reformed their evaluation processes. Samuel Culbert, a professor at UCLA’s Anderson School of Management, told The New Yorker he doesn’t think performance reviews work “in any form.”

Earlier this year, PWC’s 2015 Performance Management Research revealed that two thirds of large companies are considering revamping their annual performance reviews process with one in 20 looking to scrap formal evaluations entirely. The research also revealed that more companies were focusing on creating a continuous feedback culture, rather than relying on once-a-year reviews.

The legal profession is going through unprecedented times. The legal landscape has changed considerably in the last few years due to economic pressures, technological challenges, client expectations and market competition. It is clear that those law firms that question, adapt and change will be best placed to grasp opportunities.

Is it time to finally put the traditional annual performance review out of its misery and embrace a performance management system that is an enabler to unlocking potential to drive competitive advantage in this changing legal services landscape?