We understand the intent of performance reviews. To improve individual performance, to provide managers with information for employment decisions, and for organizations to leverage core and even ancillary strengths. Sadly, over the last 30 years of the performance review becoming a corporate staple, we've learned it does none of those things remotely well.
The feedback loop is too long
Imagine disciplining your dog a week after he peed on the carpet or rewarding him two weeks after he sat upon command? Doesn't make a whole lot of sense, does it? And while, I'll submit, humans have a better recall than most dogs (most) it's still not months long, especially when it comes to behavior. I may remember an outcome or event months down the road, but probably not specific behaviors.
Manager: "Remember that presentation you gave 3 months ago with [insert name here]?
Manager: "What questions did people ask and what were your responses?"
A reason for the gap is something called context-dependent memory. Simply put, I recall things better when I am in the same context in which they happened. Having a discussion with me months after an event puts the context WAY out of scope. Not only are the external factors different but how I feel (also known as state-dependent memory) is also widely different. I feel different today than I did yesterday, last week, or last month. I just can't associate feedback given months afterward in a meaningful way to change behavior because I really don't remember what I did. The closer to the event the feedback is given, the closer the context and more similar our state.
I feel ambushed
While some individuals may keep a running log of all the great things they did over the course of months, managers have more practice in keeping a running naughty list. Or at the very least, a list of exceptions to the norm. So when it comes time for my performance review, my manager usually has a lopsided list. Even the most well intentioned manager has a duty to coach people to better performance. But getting a list of things to improve when we haven't had (focused) conversations about them before feels like an ambush. Almost like I am getting set up with all the pleasantries of daily work life only to walk into a barrage of "do better" on performance review day. It sucks and typically I have two ways to deal with an ambush, I either fight back, or I retreat. One leads to an argument, the other leads me to privately stew - both are reactive and neither produce the best outcomes for positive progress.
Imbalance of Power
There is also an inherent power differential. It's not a level playing field. As a manager, you get to make decisions about my employment (whether I get a raise, promotion, decrease, demotion, or exit.) Every time we have a discussion about my performance, it has the potential to impact my life positively or negatively. I do not have that kind of influence. The workplace is typically not a democracy. Even in the most consensus driven organizations, there is an imbalance of influence for a variety of reasons. As my manager, especially when your opinion is the ONLY one getting submitted as my performance review, you have a direct ability to affect my life in a way I do not.
So despite what you may tell yourself (or me) it is VERY personal. It may be business...AND it is personal to me. Every time.
I don't respect the source of the feedback
This is a problem with any feedback. If I don't respect who the feedback is coming from, I'm probably not going to listen. Think of when you were a teen-ager and you received um...advice from your parents. And while much of the time it may have gone well (or not depending on your recollection - See Above) the times it didn't go well, you probably thought your parents were WAY out of touch and just didn't understand. If you think your boss has no clue about the job you do or how to do it, you are going to find every reason why her perspective is meaningless. Which leads me to the next reason.
We're afraid we suck
No one wants to be bad at their job. And for many people, feeling insecure about their own competency is a huge fear. Sometimes called imposter syndrome, people generally have a fear that someone will sooner or later figure out they are a fraud and not as good as they want to believe (especially those who are accomplished.) Critical feedback, by it's nature, calls into question our abilities. So we get defensive and we will find all the reasons we can to invalidate the data.
Single rater bias
"If you run into an asshole in the morning, you ran into an asshole. If you run into assholes all day, you're the asshole." - Raylan Givens (Justified) (Thank you Reddit!)
My 5 year old asks his mom the same question he asks me, right after I give him an answer. All the time. It's because we want to validate information. A single source just doesn't cut it. Regardless of how reputable the source is, we trust information when it is consistent. In social research, it is called triangulation, which is essentially using more than two (or more) sources to verify a conclusion (the third source). It's the same reason we leave a discussion and then seek a 3rd party (3 sides to a situation...see what I did there?). But often the 3rd party we seek falls victim to the last reason I'll describe for the individual.
We like to be right (See "we're afraid we suck" above.) As a result, we tend to seek sources that agree with the beliefs we already have (take religion, politics, or any other belief as an example.) So when we get information about our performance, we like the data that confirms our self-image (the beliefs we have about who we are) and we dislike data that calls our self-image into question. As a result, when we get information that conflicts with the beliefs we have about our self, we are likely to go to someone who makes us feel good again (a trusted friend, a loved one, etc.) We even make it hard for them to disagree with our beliefs by leading with "Am I wrong here?" or "Am I off base?" We like to be right...and most importantly, we like to be right about ourselves.
Add it all up
The performance review process just sucks for me as an individual, especially as the factors above start to add up. Getting a list of things I did 6 months ago from the person who controls my career does give me the best footing for a level conversation. And if I do not respect my manager, or they are the only person telling me that I am not doing a good job, it makes it even more difficult for me to have an open mind about how I can improve. Sadly, that is the reality of most performance reviews. Even if you only combine a few of the factors listed above, the result is still negative.
Individuals want feedback. No really, I REALLY do. If I were doing something that was holding me back in my career, would I want to know about it? Of course. But I want it in a timely fashion, from people I respect. I want it in a way that does not make me feel like I completely suck. Can I get better? Yes, I know I can, and I want to. The purpose of feedback is to provide data to adjust a process or behavior. So give me data, help me make sense of it, and give me access to resources to adjust. The performance review is an anecdote, it's not data and it doesn't help me do my job. In short, performance reviews don't work for me as an individual.