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Ask HN: Why are annual reviews so broken?

• ChildOfChaos 4y ago
  My understanding from the company I Work with who have changed there process based on feedback, the issue is that different people want different things from it. Some people want it straight, do this and get this, but we have gone to a way more mild approach where it's no longer an 'annual review' but more a 'wellbeing meeting' because some people didn't like the format and felt that they didn't want to sit and listen to being critised and that the metrics were unfair or not applicable to them. So now what we have is much worse, last year, 30% of the team got a pay rise as is company policy, however we do not know how this was dedicated and most of us have barely spoken to those that do as our direct line manager was not involved in the decision. Personally I hate them, I just want to be left alone.
• softwaredoug 4y ago
  I think the problem is many employers focus on a one way, top-down relationship where the company has the power and the company/bosses word is all that matters. Instead it should be a conversation around the two way relationship where both sides at least have the power to exit the relationship. Both sides should approach it as a conversation about the relationship and things that work / don't work from both sides.
• kasey_junk 4y ago
  Because it conflates at least 3 different things a) feedback on how to improve b) job leveling/retention and c) pay. The first is best done by peers & management anonymously, the second by a fairly objective public rubric and the last is purely market driven (no matter how much companies wish it weren’t). Collecting all the information the same way and using the data collected cross purpose leads to all of them being done poorly.
  • fnimick 4y ago
    > the last is purely market driven (no matter how much companies wish it weren’t) Why would companies wish it weren't? It lets them underpay people because "the market" broadly underpays them. I've talked about this dynamic with leaders like that, who opposed salary transparency because they underpaid people who they knew the market would undervalue, where the actual contribution of the person in question is irrelevant. As they put it (grossly), if you're a minority that would be paid less elsewhere, I'm going to pay you less here because I can. Not because you're a minority, but just because that's the way the market works. I've been in situations where the "market forces" are stupid enough that I've been paid more than someone nominally one level up from me (senior eng. vs junior). It's immoral as hell but what are you going to do? The company is always going to pay every worker as little as they can, and not a cent more.
    • kriops 4y ago
      If your comp is at fair market value, your are not being underpaid, by any honest and reasonable definition of “underpaid”.
      • fnimick 4y ago
        The problem is when "fair market value" differs between two people for reasons other than their work productivity - including protected classes such as race, gender, etc. Is it illegal? No. Immoral? I'd argue yes, if the only reason you get to pay them less is that the broader market is biased against them for reasons outside of their control.
    • robertlagrant 4y ago
      It's not immoral, any more than you bidding lower as a house buyer is immoral. Your individual circumstances as buyer and seller are different, and you need to make a free agreement that fits those. If you can't, you walk away. If you can, great. The same forces (and morality) applies to salaries.
      • 4y ago
• commandlinefan 4y ago
  As long as I've been working (since around '92 or so), my varying employers have periodically insisted that we "set goals" some time around the beginning of the year, work toward those goals during the year, and then submit to evaluation against those goals at the end of the year. Every single year I've ever seen it tried, there were a set of initiatives that were perceived as being super important toward the beginning of the year, and everybody set goals around those. Then, around the middle of the year, those initiatives were scrapped, everybody pivoted to something else, and the goals that were set at the beginning of the year were meaningless. Every. Single. Time. The only thing that was more predictable than trying to set annual goals and have them remain relevant for an entire year being impossible was managements absolute inability to recognize and learn from this inevitability.
  • INTPenis 4y ago
    The last few years I've had two managers simply check my goals as completed, regardless of results. They seemed as sick of the whole process as I was.
    • cassianoleal 4y ago
      I think most line managers are sick of those processes. I had a manager once who explained to our team of 3 people how he had to fit us in a bell curve of performance and tie our bonuses and promotions to that. Suffice it to say he started saying he was sorry but despite his efforts he could not convince the higher ups how stupid an idea that was.
  • softwaredoug 4y ago
    Same, even quarter to quarter goals are scrapped. Even professional development goals are often tied to what the company needs, and those need to be adjusted. I don't know the solution, other than just have general expectations about assigned work and commitments as those commitments come up and change. Rather than having some performance conversation that's out of sync with actual project deliverables.
  • mattbgates 4y ago
• rqtwteye 4y ago
  “ you need to do to get this much of a raise or this much of a bonus,” In sales it’s fairly simple to set clear goals that can be evaluated in the review. I think for a lot of other people goals constantly change during the year. It’s hard to evaluate that. It could maybe work if management constantly gave you clear and achievable goals for the month but that would require a lot of effort by management. In the end annual reviews are BS for most people. “Nice job last year. Keep sound what you did. We don’t have money for raises.”.
• Dwolb 4y ago
  I'm working on a problem in this space and my current line of thinking is... 1) there isn't very good definition of what most jobs are. 2) the definition isn't pulled through all your human capital management systems (recruiting, onboarding, career management, performance management, and off boarding). So, I'm working on building a product that pulls 1 + 2 together.
  • ravenstine 4y ago
    Isn't having ill-defined job titles an advantage to a company? If someone has clearly defined duties, that makes it difficult to extract more forms of work from them for the same pay.
    • Dwolb 4y ago
      In a zero-sum scenario, yes. But the positive-sum scenario would be: employees will be more productive if expectations are clear.
• kemiller2002 4y ago
  It's simple. Raises aren't there to reward you for what you've done. They are they to keep you working at the same company. Meeting a goal of what you did last year is inconsequential to the business trying to keep you. You got paid last year to do what you did. The raise is to convince you to stay and do it again the next year. The business has to decide if you are worth investing in to further its objectives. Here's an easy example. If you were going to get rid of someone in 4 months after their review, would you give them a raise? Of course not, you'd allocate that funds to someone else. That's why it's hard. The business has to judge which people they are going to focus on keeping.
• shmatt 4y ago
  FAANGMULA and all companies inspired by them have a completely broken interview process, this is the root of everything A normal interview these days is 38 minutes (45 minutes minus 2 minutes introductions and 5 minutes for interviewee questions at the end), times 5 or 6. Some leetcode, some Jedi (cultural fit), a design sketching or 2. People just go hard on leetcode, grokking system design, and memorize a few situational answers in STAR format and they're good to go. How good will they be at identifying why the Kafka consumer is lagging at midnight? Who the hell knows? So a broken system brings in thousands of new employees, now you need to define success to all of them at the same time, and figure out how fast you can get rid of those who can master leetcode but not deliverable production quality code
  • zeroonetwothree 4y ago
    For senior (and especially staff/principal) jobs there is vastly less emphasis on leetcode.
• itronitron 4y ago
  >> here's what you need to do to get this much of a raise or this much of a bonus Because they can get more out of the high-performers by not giving them a clear threshold (which is why they are called 'over-achievers') and if the mid to low performers met the threshold then the company would have to pay out a lot more in salary.
• sokoloff 4y ago
  Goals for any situation more complex than commissioned sales are highly likely to change throughout the year.
• SamuelAdams 4y ago
  In my experience annual reviews are more or less a standardized way to fire poor performers. If you run a company you know this, but for the uninitiated: there’s a lot of work to fire someone in the US. Technically most employees are at-will, however companies need to have non-sueable reasons for terminating employment. If they fire you because of race, sex, or some other protected class, that’s illegal. The employee can file for unemployment and that makes your company’s rates go up. So before terminating someone, companies get a lot of written paperwork in order. This is typically called a performance improvement plan (PIP). That usually starts at the Annual performance review - they’ll say you have poor performance in specific areas and write it down in traceable documents. The employee tries to “improve” sometimes, but if the company is adamant on terminating someone it’s really just a matter of time. Their goal is to have a strong case (aka paperwork) demonstrating poor job performance so that when you sue (or file for unemployment) they can push back with a 6 month history of documented issues.
  • urbandw311er 4y ago
    This isn't always done cynically. I don't know if I'm an outlier, but I can recall cases where I have put an employee on an improvement plan and it successfully led to their retention. In one case, the team member was really quite shocked to realise they were underperforming and actually quite grateful for the honest feedback. Rather than giving up they redoubled their efforts and we were all amazed at the transformation. In turn, we provided additional coaching, encouragement at the performance gains, and everybody ended up back on-track. The person in question was recently promoted. I don't particularly like managing people, and it's easy to slip into a lazy management style where you avoid confrontation, but the truth is that I've found people respect honesty and a chance to course correct.
    • ARandomerDude 4y ago
      > the team member was really quite shocked to realise they were underperforming That's a management fail, to be honest. The first time someone hears they aren't keeping up should not be because you started paperwork on them.
• fwungy 4y ago
  The company is run by the BOD to return value to the shareholders, e.g. VC. The assumption is they'll get more effort out of labor if they're uncertain about the outcome. No matter how valuable an employee is the company must always maintain a MAD type posture that no employee is too valuable to lose, because if that were true and the employees knew they would take the company over effectively. Part of what the annual review is is a reminder that your job is not an entitlement. It is not supposed to be pleasant for the average worker.
  • ElevenLathe 4y ago
    Yes, it's about reminding us that they have the whip hand. I have a theory that the rise of similar loyalty rituals like sprint planning and standups sprung up in the vacuum created by the now-extinct one of handing out paychecks every other Friday. Nothing says "We determine how well your family eats this week, and don't forget it." like the boss literally walking around with a box of checks.
• ravenstine 4y ago
  Annual reviews have many problems, the main one being that the incentives behind them are usually flawed. In many cases, these reviews exist because management believes it needs them. That doesn't mean that said management will actually take said reviews seriously. Once the review has occurred, the job of the review is done, which is to say that management or the business owners succeeded in making themselves feel as if they have done their job and have created a pathway to greater excellence by providing feedback to their employees. It doesn't matter how vacuous these reviews are; just pretend like they're better than nothing, and you can feel good about yourself. If all else fails, you, the manager, will maintain your sense of superiority. From the employee's perspective, there's usually little reason to take annual reviews seriously. The fact that they are annual and not more frequent subtly communicates that any negative (or even positive) feedback really is not that important, if at all, and savvy employees who care about maximizing their earnings should consider whether it's worth investing effort into "improving" when said improvement is unlikely to translate into a bigger paycheck or a fancier title. Some companies try to counter this by having employees self-review, but this backfires in a number of ways. For one, employees are incentivized to either exaggerate or downplay their strengths and shortcomings. "Always room for improvement", right? If an employee legitimately can't think of anything they need to improve upon, they're liable to make something up just so they don't stick out like a sore thumb. One way that this system does work out for employers is that it can encourage less savvy employees to work harder than they did before but for the same pay, but this may also cause burnout and higher turnover when these peons realize their station at the company and move on to better things. In rare cases, annual reviews can be used in an effort to get rid of poor-performing employees. This is not as common as people think, and is even less common the bigger the company gets. Businesses want to maximize productivity, but that doesn't mean they care enough to outright fire the mediocre or even lazy employees. Mediocrity can actually work in the favor of the business because, if such mediocrity is permitted, they can hang on to employees longer than if they demanded the kind of extraordinary excellence they claim to in job ads. "We only hire the best." No, you don't.
• d23 4y ago
  There's just no simple way to make a review system that scales infinitely and doesn't have some sort of tradeoff. There's no perfect.
• shartshooter 4y ago
  Reviews require that people's jobs are confined to a given box. Many people like to do things outside of that box, or hate being so constrained. Companies also struggle to quantify the value of some of the things people do. For example - Employee 1: Sales rep, hits quota, shows up late, leaves early - Employee 2: Sales rep, behind on quota, but everyone in her pod is crushing because she's spending extra reps helping them be better at their job. It's likely that employee #2 is in the wrong role. But if you're a mega-corp manager, all you see is that she's behind on quota, and her annual review reflects that. Let's put her on a pip and find some more people like Employee 1. It could be that Employee #2 isn't motivated by more money. Telling her "Do more sales or you're fired" could end up being pretty bad for you. You may end up getting what you want(employee 2 is gone) but not like what you get(decreased productivity for your other team members.
• bradlys 4y ago
  Because incentives don’t align. Once you make a rubric that people can actually attain - everyone will meet that bar. But that doesn’t work - you need to fire people because upper management believes that the threat of firing people will keep more unpaid labor coming out. (Generally true but it comes with a cost - lower productivity and mind wandering and doing things to not be fired… which doesn’t line up with some of upper managements higher goals…) It’s the result of a low trust society. Yay.
• GreedClarifies 4y ago
  It sounds like you want contract work. That’s available. And maybe it Will become more common in the future. Companies and employees form into these longer term relations in an attempt to reduce the burden of creating these types of task based contracts. Is it more efficient? Maybe, since it is more common than contract work.
• ghiculescu 4y ago
  Most of the comments here are the generic "all business is evil" cynicism that's rampant on HN these days. The reality is not so simple. Here's my perspective, as someone who's actually done annual reviews and tried to build/retain a great team. > drew a straight line between here's what you need to do to get this much of a raise or this much of a bonus This is really really hard to do. It's not a good idea (or even a practical idea) to plot out all the work that you want an employee to do in a year, or even in a quarter. You can prove this to yourself. Try and write down all the things you would like to get done over the next year and how much of a bonus you think you should earn for each thing. If you're in sales this is easy - it's a sliding scale ratio between revenue won and bonus. If you're in product or engineering I suspect you will not find it so simple. If you've read posts like "Being Glue" (https://noidea.dog/glue https://noidea.dog/glue), they talk the importance of work that's impactful within the team but very difficult to measure. If companies tried to draw a straight line between visible work and raise/bonus, nobody would ever choose to be glue. This isn't to say that everyone is happy with how annual reviews work. As engineers we want everything to be black and white. If I pass this unit test, I get a pay rise. As managers who used to be engineers, we'd love to be able to give engineers that clarity, because you're right, they would get hyperfocused on it and we'd get a lot more out of them. But nobody's worked out a way to make it work. Believe me: if you can invent a technique (and make a product around it) that enables this, you'll make a lot of money selling it to every single software company.
  • thunky 4y ago
    > It's not a good idea (or even a practical idea) to plot out all the work that you want an employee to do in a year, or even in a quarter I think it's possible as long as you define the work very generically. For example, replace "finish task X" with "participate in more code reviews" or "improve documentation". Sure it may water down the review, but at least at the end of the year you can reflect back on your general performance and measure it in some way.
    • ghiculescu 4y ago
      This is true, but it also dilutes the usefulness. If I tell someone "if you improve documentation, you will get a $10k raise", then I am tying a very well defined reward a very poorly defined task. "Improve documentation" could mean fixing some typos. Or it could mean documenting every un-documented public class and method. Or it could mean refactoring code to make it easier to use so less documentation is needed. These all have very different value. In a year's time, I'd have to justify why only one of them actually might warrant the 10k raise. It is *much* worse to tell someone "you were promised a raise... now you aren't getting it", than to never offer or give the raise in the first place.
• PragmaticPulp 4y ago
  > It's seems to me that if companies drew a straight line between here's what you need to do to get this much of a raise or this much of a bonus, they could get alot more out of each employee. If we could predict exactly what work needed to be done and how long it would take a theoretical employee to do it, this would be great. But we can’t predict the work with such accuracy, nor can we predict how long it should take to get done. If we planned all of the year’s work in exact detail and underestimated by even 25%, you’d be working 10 hour days every day for a year. It’s not uncommon for projects to take twice as long as estimated, in which case you’d be working 80 hour weeks. Another problem is that once you set specific numeric goals, people will game the hell out of them. I worked at a company that decided to reward people by the number of bug tickets they closed. Suddenly, the number of bug tickets tripled! People were starting to ship code with known bugs because they knew they could get some easy bug fix ticket closes to raise their numbers. It made outcomes worse even though everyone now knew exactly how to get bigger bonuses. Finally, there’s more to reviews than just the things that can be measured through metrics. If someone is crushing their tickets and committing a lot of features but they’re insufferable to work with, they shouldn’t be rewarded for that. Good managers should have their finger on the pulse of these softer aspects of performance, even though it will never be a perfect assessment.
• dyingkneepad 4y ago
  If they follow as you said and set this goal for everyone, then everyone (or at least a significant number of people) achieve it, then they can't reward everybody with promotions/bonuses, as they probably won't have the money to do so. Also, they can't decide what the goal will be for everyone, so some teams will have much easier/achievable goals, others won't, making things unbalanced. It's a complicated problem and it's also more a social/relationship problem than really a technical problem. How people interpret what you've done is much more important than what you've actually don't. Please don't try to come up with technical solutions for social problems, I see engineers trying to do this and failing all the time.
• ergonaught 4y ago
  It's communication, essentially, and humans absolutely suck at communication. No one is on the same page about it. The purpose of annual reviews is unclear, misunderstood, and misinterpreted, leading to a broken implementation in practice. Even when there is an attempt at clarity, emotional kneejerks interfere anyway. ex: Telling someone that they "Meet Expectations" when those expectations are very high just results in them feeling like you've called them "average" somehow, and people outside that process are absolutely going to misinterpret it as "Average" leading to a continuing failure to get somewhere constructive. Most of the time, there aren't great ways to be usefully objective about performance, anyway, due to missing context.
• leothecool 4y ago
  Because at the end of the day, compensation isn't tied to performance, its tied to what the market will bear.
• dboreham 4y ago
  Question should be: given that they're not useful, why do annual reviews still exist?
  • JTyQZSnP3cQGa8B 4y ago
    It's a good question. I have been coding for more than 20 years and have yet to find a good manager with a useful annual review. It's always some bashing and makes you feel like crap, or it's a way to prevent raises, or getting bonuses if you quit the company. Psychologically, it's a real mess because the grievances are always unrelated to my job.
• zeroonetwothree 4y ago
  It’s too hard to evaluate people’s work fairly. Any system is going to ignore valuable work or weight things incorrectly. Every employee is different and focuses on different things. We aren’t just assembly line workers that can evaluated in widgets per hour. How do you compare someone that ships twice as many PRs to someone that deep dives to fix that one critical bug every week? And having everything be extrinsically motivated is horrible for job satisfaction. It would actually be better to hide the reasons for raise/bonus as much as possible so people want to do their jobs for their own satisfaction (obviously people want to get paid too but it’s best not to have thoughts like “if I fix this bug, what’s the exact $ bonus increase I get”).
• 0xcde4c3db 4y ago
  In my experience, it's broken because it's theater. They've already made a top-down decision on wages, layoffs, etc. based on budget, revenue, and sales projections, but they need to pretend that the decision has some rational connection to the value provided by the individual employees, so they impose a process that produces the necessary documents to support that notion. As an IC or low-level manager, there's nothing you can put in the review that will actually change the decision because the purpose of the process isn't to inform the decision, but to justify it. You can't do anything to win or lose a review any more than Hulk Hogan can do anything to win or lose a match; you only lose by failing to put on the expected show.
• Ruined4104 4y ago
  At my company, all of our goals are ranked on a 1-5 scale. Where a "3" is doing your job. I have been told by my manager that the only acceptable ratings are either a "3" or a "4" where a 3 is doing your job at 100% accepted capacity and a "4" is going above and beyond. The only way to earn a "5" is to wear reed sandals and walk on water. A "2" means immediate PIP and a "1" means you are going to be escorted out the door. Throwaway account...don't bother searching my history.
• malcolmcolleen 4y ago
  [dead]
• apple4ever 4y ago
  Couple thoughts: 1. I really like 360 reviews, where you get feedback (anonymously) from other members of the team and even outside of the team. It's some work to do, but it can be worth it. 2. My company does semi-annual reviews, because 6 months is about the time people can remember things. That works well, and also because the review is only six questions. 3. As a manager and an employee, creating goals is hard, especially ones that are useful. I think a person should have at most two goals, one technical, and one personal. 4. My company also created a rubric for being senior, which while not perfect, is better than nothing. It makes creating goals easier. 5. My company also does not tie pay directly to the reviews. Pay increases happen once a year in a specific month, and the reviews are used to inform that, but no discussion of pay comes out of it. It lets everyone relax more. 6. Part of the problem is promotion is too hard, and a manager has to really justify that. Adding that rubric above helps a lot.
• juancn 4y ago
  One part is compliance, it leaves a paper trail, if you're a really high performer you could pretty much ignore them. They're not going to fire you if the form is not filled, but if you're not, they become justification for termination. In any case, the important part for me is to make sure that when you have your yearly or quarterly conversation there are no surprises. If there are, communication broke at some point earlier on and you and your manager should work on fixing it.