The Paperwork Exercise
It's that time again: the annual performance review. That delightful season where we document our accomplishments, strengths, and growth areas, hoping the output won't be weaponized against us later.
The process is predictably bureaucratic. HR sends the email detailing forms, questions, and manager scheduling. Many companies use "360 reviews" to gather feedback from across the organization, creating a cascade of requests.
At larger companies and senior levels, you might face dozens of these requests. These each ask you to distill complex working relationships into bite-sized summaries. The challenge is binary: work closely with someone and struggle to compress months of interactions into a paragraph, or barely know them and have nothing meaningful to contribute.
Then comes the self-evaluation, the strange psychological dance of projecting confidence without arrogance. At Amazon, I had to select three "superpowers" aligned with leadership principles. Choosing "Are Right, A Lot" always felt audacious: "Why yes, I am often correct". Other companies favor the classic "what are you good at, what needs work" format, which feels like a callback to derided interview questions about greatest strengths and weaknesses that reveal nothing insightful.
After the paperwork comes the formal sit-down with your manager (and perhaps HR). Picture the most scripted one-on-one ever, complete with conversation prompts about your "performance." It's universally awkward because for many, it's the most direct conversation about their value to the company they've ever experienced. Because this evaluation is handled through official channels versus informal, private conversation, it can feel like the Eye of Sauron is staring directly at you as you and your manager document your performance using the most generic and vague terms possible to avoid a lawsuit.
The stakes are real. Reviews drive raises and promotions. Managers with strained relationships offer vague, unhelpful feedback, or worse, use the process to quietly push out unwanted employees through systematic undervaluation. For avoidant leaders, making someone feel underpaid and underappreciated beats having difficult conversations. It's better for the employee to read between the lines and recognize it's time for them to exit versus being direct that it isn't going to work.
Thankfully, my own experiences are largely positive, thanks to excellent mentors and managers. I've rarely dealt with situations described above. But I hear the horror stories: arguments over ratings, re-litigation of old projects, performance issues surfaced for the first time during reviews rather than when they actually occurred. One friend shared an anecdote where a new manager sabotaged her project by gutting her team's budget, not letting her re-forecast her goals, then giving her a poor review when they inevitably didn't hit it. She was laid off and replaced with someone who the new manager worked with at an old company. Never mind she had been there for close to a decade and had a track record of success and promotions prior to this.
While any system can be carefully weaponized by bad actors, for many of us, the annual performance management process too often becomes an eye-rolling, box-checking exercise rather than a valuable system for employee development and growth.
Naive as it may be to say, I do believe these systems, when reinforced with strong cultural habits and leadership backing, can be transformative for improving results while making the workplace high achieving, functional, and even enjoyable for all involved. To get there, we must first understand the core challenges to achieving this goal.
Let's Break Down the Challenges
There are a few reasons why performance management can be challenging to execute well. Below are five key reasons why performance management systems often don't achieve their set aims.
I. Managers aren't trained to do this
Growing startups and large corporations are no strangers to re-organizations. "Shifting resources around" to better align the team to new goals or organize around different leaders is common. While ideally growth and increases in scope happen from consistently delivering, it's not uncommon to experience growth when these organizational shakeups happen.
I remember having conversations with leaders on my team about my next move, and I vividly recall saying I'd rather take a role to build deeper functional expertise than take on people management responsibilities. I felt that managerial responsibilities would be foisted upon me at some point when it was convenient, but the opportunity to learn a new function with a strong leader was a rarer opportunity that would serve me better long term, even if becoming a manager sooner would be seen as more prestigious and signal more progression.
Sometimes managers are selected not for their skills in people management, but for their functional expertise and willingness to deal with the burden of having multiple people reporting to them. Management often represents career progression and increase in salary, and so it becomes the natural next step for many. After all, there are no C-suite roles that are also individual contributors.
I'm a firm believer that the best managers are functional experts. If not virtuoso-level skilled, they need to know enough about the domain so that they can lead by example, understand the team's work, have the respect of their team, and sniff out any BS.
However, managerial expertise and functional expertise are not the same, and the skills needed to excel as a manager are often uncorrelated to the skills needed to succeed as a functional individual contributor. "What got you here, won't get you there".
Because of these factors, many managers aren't equipped with the skills to handle topics like performance management effectively. While they should have enough functional competency to help gauge where a person is at skill-wise and where they may need to focus, delivering feedback, providing coaching and mentorship, and overall ability of the manager to support and develop the talent on their team is fundamentally a different skillset. While these skills may get developed through informal mentorship, onboarding buddy roles, and participating in the hiring process, building a strong managerial skillset quickly will require additional, intentional efforts.
If new managers are selected as needs arise without adequate planning so that they develop managerial skills before they are tasked with management, nor get the support and feedback to navigate these challenges effectively, it limits their ability to conduct productive conversations with their team members.
A great manager I worked with once said their primarily role was to remove blockers from getting my work done. They also shared their role was not to tell me what to do, but to offer guidance and feedback based on what I identified as the priorities and how to best get the work done.
The manager, in this case, plays an advisory role: ensuring that the right people are in place and that they are moving in the right direction. Managers often have visibility to more senior leaders and can help translate strategic direction from the top into more tactical guidance for their teams to help move towards those goals. Managers benefit from getting equal exposure across their organization and peer organizations to identify opportunities for collaboration, reduce redundancies, and generally help teams realize their potential. Like how a wealth advisor thinks about capital allocation in a portfolio to achieve a goal like wealth preservation or growth, managers allocate their talent to the most critical initiatives and enable them to be successful in achieving these aims.
In short, managers need to have managerial skills cultivated so they can shift to a leader and advisor, which includes not only knowing how to improve performance, but coaching their teams effectively. Well-intended performance management processes don't work if managers can't implement tactics on the ground with their teams.
II. Lack of clarity on what good looks like
Performance management systems often try to translate qualitative measures into quantitative ones. This can be difficult to do effectively, especially when judgment is required to determine what "good" actually means. If the organization does not establish its values clearly, how to execute while embodying those values, and what its goals are and how to measure them, performance will be unclear. What "good" is to me will look different to you unless we come to a shared understanding and agree across a number of dimensions.
Many organizations lack the rigor to invest time upfront establishing these while also recognizing that specifics may need to shift pending business conditions as organizations adjust. This can make "good" seem incredibly nebulous. Like a piece of art, I can think it's a masterpiece while you think it's dreck. Employee performance shouldn't be evaluated like a piece of music, it should have more objective measures that teams can rally around to drive the right outcomes.
At a recent lunch, I caught up with a former colleague who moved to another organization. They shared their new organization was rapidly hiring from companies across the industry, largely due to their domain knowledge in the field. However, the company did little to establish and integrate these cultures, resulting in pockets of the organization that learned how to work one way versus another. Like immigrant enclaves in a new world city, the organization hired people from a few diverse firms with vastly different working styles without ever firmly establishing what their working style was, leading to teams preferring to work with their former colleagues who were used to doing things "their way".
For me, I recall when we had a new leader at a startup I worked at, who wasted no time bringing over their team from their old company. They brought over their old processes without consulting the broader organization, leading to mistakes in payroll and tax reporting. When prompted as to why this was done this way, the person said "well this is how we did it at my last company."
This lack of clarity leads to the source of all conflict -- unclear expectations. Performance reviews can be where this comes to a head: The employee who thinks they've been incredibly diligent all year gets a review that says they "need improvement". This is often a shocking reality check.
But there can be more layers to this. The manager setting expectations and delivering the feedback may also not be providing visibility into how strongly others across the business are doing. The best point guard on the JV basketball team may not be able to sniff playing time on varsity. We may think we are great relative to those around us, but on a broader scale, we are worse than we think.
We'll take more about comparison more below, but the key point here is around how employees know if they are doing well. In sales, this is straightforward: you hit quota or you don't. Other roles often have fuzzier definitions of good performance or metrics that can be easily gamed. Does it matter how many tickets and engineer cleared from the JIRA backlog or how many training courses a learning designer built? What is the outcome of these actions and how do we measure them?
All tasks in business help increase revenue or reduce cost. This boils down to doing new things (ie launching a new product) or getting better at things you are already doing (ie driving efficiency). Everything we do needs to somehow trace back to that with a reasonable goal set so that employees can be evaluated on their contributions more fairly. This goes back to inputs, guardrails, and outputs, and creating clear scorecards to set expectations and regularly meeting to facilitate these conversations.
If teams don't know what good looks like, it is impossible to know who a top performer is. My take on the top performer will be different from yours, unless we clarify what we actually mean when we say "top performer". Know what good looks like and make sure it is clearly articulated and frequently reinforced. This means organizations need to be clear about how they do business and reinforce the behaviors and work styles that they want their teams to embody. This not only will make expectations clear, but also help integrate teams with diverse backgrounds more as they come to understand what good looks like. In my experience, Amazon does this exceptionally well.
III. Comparative vs. Developmental Focus
Jack Welch became General Electric's (GE's) CEO in 1981. He had been in the company over 20 years, and was hungry for change. Over the next two decades, until his retirement in 2001, Welch transformed GE from a lumbering conglomerate into what many considered the world's most valuable corporation, its market capitalization soaring from $14 billion to over $400 billion under his watch (never mind the rough period they went through almost immediately after).
Today, Welch is often better remembered for his approach to performance management rather than his financial record as CEO. His legacy and impact in this space is still felt today.
Welch's approach was called "differentiation", but it is better known as "stack ranking" or its more derogatory moniker, "rank and yank". The system involved an annual tiering of their employees:
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Top 20% -- the high performers, or "A players", who would be rewarded handsomely for their contributions. These were the future leaders of the organization and given the most significant financial rewards and opportunities.
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Middle 70% -- the "average" performers, or the "B players", that make up the backbone of the company's workforce.
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Bottom 10% -- The "low" performers, or the "C players", that were systemically culled from the organization.
Welch did this because he felt GE had become "too big and too comfortable", leading to excessive bureaucracy and complacency. He argued "the company wasn't good at measuring employee performance, which killed motivation."
Welch felt that without clearly delineating and rewarding high performers while pushing out low performers, organizations would drift towards accumulating a mass of underperformers, leading to a slow decline.
Welch's opinions on the matter were reinforced by the state of GE's stock price, which had lost half its value accounting for inflation in the previous decade. To Welch, it signaled that the old approach was not working. Elevating top performers and giving them outsized rewards while pruning the bottom of the organization was necessary to continue striving towards excellence.
Welch believed that to push the staff to work harder to innovate and achieve company goals, there needed to be a level of fear they could be pushed out, while providing top employees with greater rewards to acknowledge their contributions.
This performance management process was a heavy task for managers. Annually, supervisors were required to rank their direct reports against one another. This was not individual performance ratings based on the employee's development opportunities, but a comparative exercise where all employees were placed on a curve to match the distribution described above. The company invested heavily in what it called "Session C" reviews: intensive, annual evaluations that could last for days as executives debated the relative merits of their people. Those labeled as top performers received stock options, promotions, and choice assignments. Those at the bottom faced what GE euphemistically called "career transition support."
Welch and his adherents pointed to undeniable benefits of this approach. GE's talent pipeline became legendary, producing CEOs for major corporations like Boeing, Home Depot, and Warner Brothers Discovery.
The company's culture grew intensely competitive and results-oriented, with little tolerance for excuses or bureaucratic drift. This was reflected in the share price, which grew during Welch's tenure: GE's market cap increased from $14 billion when Welch took over to over $400 billion. Perhaps most importantly, the system forced managers to confront difficult personnel decisions they might otherwise avoid, breaking through the typical organizational inertia that allows underperformance to persist.
While the organization's financial performance improved, this came at a significant cost to the humans who made it happen. Critics argued that forced ranking created a Darwinian environment that rewarded political maneuvering over collaboration. The perception of being a strong performer became the paramount goal. To quote Charlie Munger: "Show me the incentive, and I'll show you the outcome".
Employees learned to protect themselves by hoarding information and undermining colleagues, since helping others might improve their relative standing in the rankings. The system proved particularly problematic for teams where cooperation was essential, turning natural allies into competitors. Long-term projects suffered as people focused on short-term metrics that would influence their annual reviews. This also led to increased concerns around fairness and accuracy of the reviewers, as "low performance" was not always clearly defined. Instead, the mechanism could push out those who were unlucky enough to be the weakest link on a particularly strong team or had difficult relationships with their leadership. Company metrics may have improved by giving the organization a needed jolt, but incentives shifted to reward individual outcomes over long-term organizational goals. GE would have a tough time after Welch left, with GE particularly exposed during the 2008 financial crisis and struggling for many years after. Only recently has the company started to turn things around.
By the time Welch left GE, the "rank and yank" system had outsized influence across corporate America, where many large organizations instituted similar policies to spur competition among employees and never allow any employee to get too comfortable, or risk getting fired. Companies like Amazon, Microsoft, and Enron all adopted similar policies during Welch's popularization of this, and critics say that Welch's management practices have led to the increased social acceptance of layoffs. While they were once a taboo, they are now an acceptable strategy to cut costs and boost profit in the short term.
Comparative ratings may also miss other aspects of performance that are harder to measure. Sports fans enjoy ranking players to determine who is the greatest of all time or who was the most valuable player each season. Many sports in North America have an All-Star game to celebrate the top-rated players each season. Most of the players selected to this event are usually the game's "stars", players who the leagues promote due to their marketability and strong performance against the most meaningful, traditional metrics in their sports, like home runs for a baseball player or passing yards for an NFL quarterback. This doesn't capture the seemingly invisible value or influence of older veterans on team morale or "glue" players who plug gaps and contribute in ways that are hard to articulate.
Comparative rankings are both a source of positive and negative reinforcement. Positive for the rewards as a high performer and negative for the punishment as a low performer. The fear of being in the bottom ten percent inspires a certain level of performance. As Daniel Kahneman notes in Thinking Fast & Slow, loss aversion is a more powerful force than the prospect of future gain. Thus, fear of being a low performer is much more powerful a motivator than the rewards of high performance.
However, Aubrey Daniels notes in Performance Management that negative reinforcement is best suited for getting behavior up to a baseline level of acceptability. Positive reinforcement is necessary to get discretionary effort beyond enough performance to avoid bad outcomes. Welch's GE, by emphasizing comparison, led to a competitive environment that may have reduced bureaucracy and inertia, but simultaneously created fear and a lack of collaboration, hurting the company's position in the long run. When fear of being in the bottom 10% is a primary motivator to do your job, you won't do much more than ensure you stay out of that band. There needs to be something positive to run towards rather than something negative to run from.
Other companies have explored other ways to focus on developmental performance instead of comparative. Instead of pitting employees against each other to drive competition, the focus is squarely on the employee, where they are at, and where they need to go. Evaluating each individual against the requirements of their role and determining if they are succeeding based on performance measures and behaviors is certainly more employee-centric, but without strong accountability it can become lip service to actually driving performance improvements. It can be easy for managers to not have difficult conversations about performance and instead tell everyone they're doing fantastic. While a fuzzy, feel-good approach can build trust and psychological safety, it's important that there is accountability for low performance and rigor. There is a balance between making employees happy and confident in their roles and igniting motivation to get things done well.
Your feelings on comparative and developmentally focused performance management programs may depend on how you view the relationship between labor and capital as well as employee-employer dynamics. For me, we should strive to create the incentives that drive outcomes that are mutually beneficial for everyone in the relationship, while providing some level of employment protection to avoid poor labor practices. Companies may not rely on layoffs as a strategy if rules were in place to make this more difficult. However, companies aren't charities and shouldn't feel forced to keep around employees that are not doing their jobs well. This is why managing performance well is so critical. If incentives are aligned from the start and the environment fosters good behavior, employees will excel and business will thrive. The challenge is in balancing this at an organizational level when every employee has different skillsets, experiences, and personal circumstances that fundamentally shape their relationship with the organization, and thus their performance and motivation.
Over-indexing on rigid comparative ranking and ritualistic culling of the workforce is likely to create a short-term oriented, combative, and self-interested environment, but over-indexing only on employee development without establishing any kind of performance bar may make the exercise meaningless. Some level of competition needs to exist -- the best employees want to be on teams that encourage each other to strive towards excellence. Competition should be friendly, not cutthroat.
For me, I prefer systems that focus on developing each employee, but have some comparative elements to ensure employees know where they stand and inspire some level of accountability without rigid mandates about termination. Implementation is nuanced, and we will talk more about that later. The key piece here is to remember that performance management culture can have outsize impact on performance, and creating poor incentives through well-intentioned systems could lead to unfavorable results for the company's performance in the long-term.
Any team will, by nature, have folks that are the "best" and that are the "worst", but if everyone is performing at an elite level, do they need to be let go to make room for an unknown new hire who might be better? There is not only the cost of firing and re-hiring, but the hidden, emotional cost of team members being forced out. When employees don't agree with how they are evaluated or see a system removing people because the system "has to" do so, will this motivate them to do more? I have my doubts.
IV. Disconnected from Reality
Performance management happens in a few layers at the organization. First, you have the relationship between the manager and the employee. This is the biggest variable, as every employee will have their own development needs and managers will have their own styles, expectations, and managerial skillset. No two employee-manager relationships look the same. Yet, the second layer of performance management is the top-down, process-oriented performance management system proposed by the upper levels of leadership. This is typically the annual review cycles that require formal documentation.
This dichotomy can create a disconnect and misalignment of incentives. Worse still, the performance evaluation mechanisms can feel disjointed and disconnected from the reality of the work. A one-size-fits-all mandate from the top doesn't capture the nuance of different roles, experiences, and career trajectories. It may lead to employees being evaluated against the wrong criteria, which could incorrectly identify low performers and create disillusionment among staff who feel that their efforts aren't adequately rewarded or understood.
When performance management systems are built in isolation or for purposes of documentation, they can feel like yet another "check-the-box" exercise that doesn't add value. In my career, annual reviews at times have felt like documenting for the sake of documenting, without actually delivering anything meaningful.
Similarly, performance becomes more and more difficult to measure in environments that are collaborative. In my roles, I've rarely been the "sole" person owning a deliverable. I've needed to collaborate with subject matter experts and designers to build training. I've needed to work closely with hiring managers and interview teams to bring on top candidates. Many functions that are internally-oriented are inherently collaborative. Isolating individual contributions is messy and often a political exercise, which creates a negative environment of distrust when the evaluation happens at the individual level. Who gets "credit" for the project going well among a group of peers with different managers and leadership chains? Everyone involved "drove" the project to successful completion?
This is also misaligned from the work actually being done. Work is increasingly collaborative, with teams having dependencies on one another. Much like the stereotypical "group project" in school, it can be difficult to parse out each individual's contributions. The performance management process and its common measurement of individual performance can miss this nuance, making the process feel unfair and unhelpful in employee development.
V. Lack of Regularity
We've talked a lot so far about the "annual" review. Once per year. Only one time in the year that performance is evaluated.
This seems to be a vestigial practice -- a leftover in our corporate biology -- that normalized the practice of an annual review. Elton Mayo, known as the Father of Human Resources, studied the relationship between productivity and the work environment, influencing performance evaluation practices in the 1920's, while it wasn't until the 1970's that numeric ratings started to get used to help mitigate bias from purely qualitative reviews.
Why once per year? Much like the New Year's resolution, the annual period to reflect and evaluate in 12-month cycles has felt like the "right" unit of time to measure this in. However, work today is much faster than it was one hundred years ago. We can communicate with anyone around the world instantly. You can order something online and have it arrive later that day. Labor productivity has increased dramatically the past century as technology improved. As such, our ability to grow and adapt as we react to fast-changing situations is more and more important. In a year, a lot can change and we too also can undergo great change. Is a full year really the right way to still evaluate someone's contributions?
More organizations are moving towards continuous feedback cycles, yet the annual process remains a fixture. Conversely, I've talked with friends who go months without ever speaking to their manager about their work or getting any feedback on what they deliver. It's insane.
Feedback is the stimulus that shapes how we learn and grow. It's hard to know the direction to take and how to improve without this. Regularity of feedback is important, not only for getting this direction, but also to receive reinforcement to keep going at all.
Think about video games -- they offer direct feedback almost immediately after the player makes an input. Candy Crush is a common example, with flashing lights and colors alongside large text telling you how epic you are for the sick combo you just pulled off. Meanwhile, feedback at work can be slow, and by the time you get anything at all, too much time may have elapsed for it to even feel meaningful -- you've already moved on or figured out what to do on your own. Time kills all deals and gaps in feedback certainly sap motivation to keep progressing.
How Do We Solve for These?
I. Select and train managers for people development skills
This should be obvious, but it isn't always a focus -- especially when promoting managers from within who don't have a people management background.
The move from individual contributor to manager should not be done without adequate proof the manager is ready for the responsibilities. This requires 1) setting clear criteria to define what makes a good manager, 2) creating developmental opportunities for future managers before they are thrust into the role, and 3) thorough manager onboarding and support for when they are in seat.
Organizations need to have a clear management philosophy to create consistency across the business and highlight the behavior that is most valued for leaders in the organization. You don't want a situation where employees are leaving or constantly looking to transfer to escape a bad manager. While not all managers are created equally, having a strong sense of managerial culture and making it clear to both managers and employees what good management looks like will help organizations establish a baseline level of competency. This should be informed by the organizational values, with specific behaviors tailored for people leadership similar to how we build rubrics for different functional roles. More on that later.
I'm a firm believer that your best managers are likely to come from within, especially in environments that are already high performing. While external hires are great for turnarounds and getting alternative perspective, employees who are steeped in organizational values, have the context and credibility among their peers, and know what it takes to be successful in that particular environment are likely to be well-equipped to build and grow successful teams. Of course, they cannot do this alone: they need help.
If you have employees that express interest in management or show management potential, providing them with opportunities to build and demonstrate these skills will help better understand where they need to grow to be ready for a full-time management role. These opportunities should include serving on interview panels, being an onboarding buddy for a new hire, or acting as a mentor for a junior employee. Give future managers chances to build these skills before you need them. That's how you build a strong bench of talent, motivating your best employees, and putting your company in a strong position long term.
II. Have a rubric that highlights role and level guidelines
Clarifying role expectations for different levels of seniority is essential for managing performance. This is especially important when discussing promotion opportunities and performance gaps.
Rubrics serve a few key functions: 1) it provides employees and managers with shared understanding of what is needed to be adequately performing at each level and 2) creates consistency across the organization, helping to mitigate bias in each individual manager-employee relationship.
Clear expectations start with an understanding of where the employee is at and what good looks like. The space in-between is the coaching and development plans managers and employees collaborate on. The rubric creates clarity on what to work backward from so that they can build a path to get there.
III. Enforce regular check-ins and development
The most well-laid plans and ideas will fail without the accountability to ensure that it's progressing as intended. Too often, employee development conversations, and even regular one to one meetings between employees and their managers, fall to the wayside. Whether this is because both sides are "too busy" to meet or there is fraying in the relationship -- whatever the cause, it's important there is some level of accountability to ensure these things are happening.
Think of it like basic hygiene for your teams. Much like brushing and flossing your teeth, getting eight hours of sleep, and regular bathing are needed to maintain a certain level of health, regular one to ones and career development conversations are important pulse checks to ensure strong employee and organizational health. The one to one meeting in particular between the manager and their employee is an important checkpoint to ensure projects are progressing and that employees are moving forward in their personal goals.
I'd even argue the better use of the one on one is singularly focused on the latter -- the employee and their place in the organization. Coaching and opportunities to continue improving. Instead of getting a regurgitation of a status update you can read in whichever tool you're using, the one on one time should take a bigger picture view of where the employee is at and what they are working towards in the long term. This could be career development guidance towards a promotion or a role change, or discussing opportunities for mentorship -- whatever it is, one on ones need to be 1) conducted regularly and 2) not redundant with other meetings that occur in the day to day work. This makes employee development and getting a check on not what employees are doing, but how employees are doing, will provide teams with good insights into what is working and what isn't and how to ensure top performers are continually challenged, developed, and retained in the long term -- a critical component of success to any organization.
IV. Re-evaluate the specific components for evaluation based on where the business needs to go.
When I first graduated from university, a recruiter from a large staffing firm reached out to me about an opportunity with a Chinese bank. She was looking for an entry-level HR person with a degree in business who knew some Mandarin. On paper, I was a pretty good fit for what they wanted. I was excited to interview for what would be my first full-time position with a proper salary and benefits.
I arrived at their office, which was a small floor on a building in Midtown East. I met the interviewer, who seemed surprised that I was not Chinese. She asked me a few basic questions about my experience and interests, and shared more about the job. Being 21 and unemployed, I barely remember much of this conversation beyond the overwhelming desire to get something that felt remotely professional to start getting a paycheck to get my adult life started.
After a short chat, she took me to a back office filled with old computer equipment and desk supplies. I sat down at a small desk cluttered with old computer equipment and was asked to navigate to Microsoft Word.
For context, the year was 2014. This computer was running windows XP. The monitor was one of those original flatscreens. You know the kind, like the first iteration of them when the prior generations were the beige behemoths that are commonly associated with offices in the 80's and 90's. Needless to say, this was out of date tech.
I was told the next portion of the interview would be a test on Microsoft Office. I was using an interview test version of the software that had a prompt and wanted to see if I could successfully navigate Microsoft Office '97. I had not used this version of the software since my elementary school years. While Office didn't change much over that time, there were still some small UI differences.
Everyone says they are proficient in MS Office. It's the software suite that runs the world. The world economy would crash if Excel stopped working. Powerpoint and Word are how many businesses communicate. We all use this software. The interviewer saw I could produce a resume using Word, so why did I need to prove it here with this ancient testing version?
The software was incredibly unforgiving. I remember it asking me to navigate various menus to do obscure tasks. What's worse, is that the test software left no room for experimentation or guesswork. You had to figure out which menu the option was nested under on the first try, or else you'd get marked incorrect, unable to try again, instead being asked to try the next question. Needless to say, I did poorly. Even though I use these tools all of the time, I will look up specific commands or google where to find specific menu items. Memorizing exactly where everything is in MS Office tools isn't something I ever prepared for, because so much info exists elsewhere that helps me navigate when I do need to do something. Although I received no feedback from the test on which answers I got wrong and what they were looking for was, I knew I failed.
After I finished the test, the interviewer came back in and thanked me. I asked the interviewer: "So this test was on MS Office '97. It's been a long time since I used that version. Is this what the bank uses?"
"Oh no, we just get asked to use this version for the interview testing"
I was stunned. So you spend the interview time testing me on software that the team doesn't even use, that I already demonstrated proficiency of based on the materials I shared with you, using a test that doesn't actually measure anything meaningful beyond my perfect recall of specific menu buttons in Word that would take a few seconds to search for through guess and check or Googling it.
Not surprisingly, I didn't get this job. I would've loved to met the person who did, honestly.
I share this story to highlight the importance of evaluating what actually matters. Software gets updated, job scope evolves, and so on. Testing prospective hires on deprecated software doesn't actually help you evaluate the candidate's actual ability to do the job at hand.
If this is what they're evaluating in an interview, can you imagine how performance management worked at this company? I've been tempted to try re-applying again to see if they still do this.
Regardless, the lesson here is that performance management and the methods you use to evaluate talent cannot be static. Building a system for this that works in year 1 may not work in year 2. Simple as it sounds, you should be regularly re-evaluating what your system evaluates and if those are weighted correctly or are even the right things.
This is especially true in fast-moving fields like tech. For example, five years ago "AI skills" would not have been on anyone's radar to evaluate, yet now all we are asked to do is figure out how to apply this new technology into our work. Updating what skills you evaluate and reward is important to ensure you're incentivizing the right behavior that help the business grow. If not, you'll be rewarding a team for being expert on the last century's legacy software.
V. Build system that evaluates how people demonstrate values and outputs
When you get an annual review that says "meets expectations", how is this actually defined? What components are meeting versus above or below these expectations?
Transparency in the system is important for team members to understand what this means. People should know where they stand throughout the year, and the performance management system should adequately evaluate how team members demonstrate ideal behaviors and drive required impact.
There are a few ways to do this. A lot here depends on the size of your organization, the nature of your talent and the work that they do, as well as the balance of measuring behavior vs. outcomes. For example, evaluating salespeople will likely be more outcome driven because their roles are easier to measure and more is theoretically in their control. For roles with harder-to-measure outcomes, more emphasis should be on behavior -- ask if they doing things that are aligned with the values of the organization and helping enable others to drive more measurable outcomes within the scope they control.
There is no perfect science to this, but the core of it is to be transparent about what is being evaluated and why it matters. If the team understands how the organization thinks about performance and knows what it values, it makes it much easier for employees to adopt these behaviors and drive the desired outcomes. We will talk more about this later.
How should I start?
All of this is reinforced by having strong practitioners to build out best practices and enabling managers to be stronger performance managers. Managers and people leaders most critical job is to develop the talent they have so their teams can execute most effectively. It is a partnership between people teams, leadership, and managers to develop the right system to effectively evaluate and reward employees. The goal is to identify top performers, help them get better, reward them for doing so, with the goal of retention. This leads to better business outcomes while reducing costs associated with turnover.
Now that we have alignment on the challenges and opportunities, we can talk more about how to build effective performance management systems.