So you think you've had it with performance reviews?

A few years ago, Chris Oster's unit at General Motors got so fed up with traditional reviews that it abolished them. "There were so many problems - for managers and for people being appraised," explains Oster, director of organizational development for the GM Powertrain Group. "We had 'rater error.' We had the 'contrast effect.' We had the 'halo effect.' But the biggest problem was that feedback wasn't leading to changes in behavior."

Darcy Hitchcock, president of AXIS Performance Advisors, helps companies create high-performance work systems, including feedback systems. She says that one of her most painful professional moments came from a performance review early in her career: Her boss rated her a four on a five-point scale. Though most people would consider that a decent score, Hitchcock agonized over why she didn't get a five. She confronted her boss: What steps could she take to get a perfect score? He had no answer. Angry and confused, she left the office and spent the day in a nearby park. "In the space of a one-hour meeting," she says, "my boss took a highly motivated employee and made her highly unmotivated."

Many years ago, top executives at Glenroy Inc., a privately held manufacturer of packaging materials outside of Milwaukee, held an off-site at which they reviewed key company policies. A week later, Glenroy held a rally in the company parking lot at which employees built a bonfire and burned its policy manuals.

The company's well-established approach to reviews literally went up in smoke. But unlike other policies, which Glenroy refined or reinvented, reviews were never reinstated. "When people find out that we don't have formal reviews, it drives them crazy," says Michael Dean, Glenroy's executive vice president. "They don't understand how we can run the business. Leaders here provide people with feedback. But the way for it to be effective is on a day-by-day, minute-by-minute basis - not twice a year."

Feedback matters. The only way for people to get better at what they do is for the people they work for to provide candid, timely performance evaluations. "In today's environment, you have to evaluate what's changing and what's staying the same, what's working and what's no longer working," says Bruce Tulgan, author of FAST Feedback (1998, HRD Press) and founder of Rainmaker Thinking, a consulting firm based in New Haven, Connecticut. "Feedback plays that role." Anne Saunier, a principal at Sibson & Co., a consulting firm based in Princeton, New Jersey, puts it this way: "If you have ideas and information that will help someone perform better, it's hostile not to share them."

So why are reviews still the most painful ritual in business? A 1997 survey by Aon Consulting and the Society for Human Resource Management reported that only 5% of HR professionals were "very satisfied" with their performance-management systems. In 1995, William M. Mercer Inc., based in New York City, polled executives about reviews. Only 7% said their systems were "excellent"; more than 70% had revamped them or were planning to.

Part of the problem with reviews is that human nature hasn't changed - few of us enjoy hearing about our shortcomings, and few of our bosses and colleagues look forward to describing them. Part of the problem is that work itself has changed - it's more team- oriented, less individualistic. The tougher it is to measure individual performance, the tougher it is to evaluate it.