Or, Maybe Not
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On the other hand, perhaps times are changing and the status report really is becoming a corporate efficiency relic of times gone by. In todays very connected world an alternative option would be to set up individual project blogs or use a project portal to allow team members to post items when issues arise. Let everyone in the corporate food chain see the same status in one central location.
One problem here could be lack of a filter, resulting in upper management overreacting to issues that are misconstrued. Some thought needs to be put into the controls and processes so you dont end up with a mish mash of incongruent (or incorrect) information that just leads to confusion and bad decision making.
Lets finish up with the original question. For project team members, are status reports a necessary evil? My conclusion is that as a manager you are responsible for the project. If a person fails at a task, it is ultimately your responsibility and therefore you need a clear window into progress or lack thereof.
So no matter if they blog it, talk it, or write it, team members should be accountable for timely communication of their task status. The only way to avoid nasty surprises is through some combination of verbal and written status updates.
Feel free to give the informal methods a try, but if the communications arent coming through loud and clear, then perhaps some micromanagement is in order. Although I prefer to think of it as responsible management.
Now excuse me while I go see what my employees are up to.