Performance reviews give managers the chance to set firm goals for their employees--and inspire them to reach new heights. But are reviews being done the right way?

I teach a class of military veterans, and each class session teaches me more and more about newcomers’ expectations of the corporate world.

Recently we discussed performance evaluations—both how they took place in the military, and how they typically take place in the corporate America.

We found a number of similarities. But not good ones.

Take, for instance, what one former Marine told me. He said that Marines in leadership positions are told that they will have performance evaluation meetings with a superior at least once a month. But in several years in the service, he only had four or five such meetings.

That reminded me of a previous job I held. The company’s HR policy stipulated that we would have quarterly performance reviews. Like the Marine, I had only one in several years.

Sound familiar?

Performance reviews—done the right way—can accomplish many obvious tasks. From the employee’s perspective, a review can help them understand how they’re doing in accomplishing previously established goals—but more importantly, it helps them set new ones.

And for the employer, a formal review provides the opportunity to help set those goals, and in the process, push their people to reach new heights.

But studies show some troubling truths about the state of the performance review. A recent piece in Psychology Today cites a 2005 survey in which 87% of employees and managers felt reviews weren’t useful or effective as well as a research article that found that at least 30% of reviews resulted in decreased performance.

So what’s the problem? There are probably a few simple answers. For one, managers probably aren’t conducting reviews as often as they should. And more importantly, the reviews themselves are probably flawed—meaning, they don’t get to the heart of what’s important to the employee, like a true evaluation coupled with constructive suggestions and goal-setting for the future.

How often do you conduct evaluations? What are the most important ingredients?

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