There's a prevailing opinion that performance reviews aren't the best way to evaluate employee performance and that they might do more harm than good. In fact, plenty of high-profile companies have ditched performance reviews all together, including major corporations like Microsoft and Dell. And research supports this move, suggesting that performance reviews can actually hinder or halt progress in the workplace, by demoralizing and discouraging employees.
This negative view of performance reviews is generally directed at rank and stack reviews, which assign employees a number to rank them within the department or company. In fact, some studies suggest this type of review process can be detrimental to an employee's motivation and overall mental health.
A video from Strategy Business outlines how, according to neuroscience research, ranking employees this way can promote "high levels of frustration, less willingness to take risks and working against each other." The idea is that it creates a flight or fight response in the area of our brains that used to keep us safe from danger, like being chased by a lion, in our primal days. The video also illustrates how ranking employees numerically can eventually become a self-fulfilling prophecy by reinforcing an employee's belief that they are stuck at that ranking, and leaving them unwilling or unable to break out of that category.
