Skip to content
8 Aug 20239 min read

What’s wrong with how we manage people and measure performance?


Our people are our most valuable resource; they make our organisations successful and give our products/services real meaning. Most of us spend a huge part of our lives working, and I believe it’s the organisation’s, and indeed every manager’s, responsibility to help every individual realise their potential.

Why is managing people and measuring performance so important?

Most organisations look to review performance and link this to remuneration, bonsues and often retention of employees. The managing of individuals and teams to maximise their performance, and be able to consistenty, objectively and fairly measure this is essential for both trust and the ongoing engagement of employees.

Getting it wrong means lost productivity and, often, the eventual loss of valuable employees.

Why are managers to important when it comes to managing performance?

Managers are the key, or the weakest link, when it comes to creating and motivating high performing individuals and teams. Their approach to managing performance can be make or break.

But how are managers supposed to step up to the plate if they’re not given the tools, training and support to consistently and effectively do this?

Often the status quo is that they learn from their own experiences and (often) the ‘systems’ which are foisted upon them to provide a quick fix to managing and evaluating performance, and sometimes future potential. Often these systems help create inbuilt prejudice and self-preservation in the results they generate (who wants to be associated with the ‘lowest scoring’ team or department?).

Not everyone’s getting it wrong. However, from many people I’ve spoken to, there’s still an “it’s annual performance review time”-esque approach to performance which is often used to justify salary increases (or the lack of them) or why someone got promoted (or didn’t get a promotion). The “()” elements reflect that the process can often be quite a negative experience.

Let’s explore some of the approaches to standardised performance reviews.

People aren't binary

People aren’t binary or two-dimensional. Their innate potential, current/potential worth and performance can’t be boiled down into singular questions with a “yes or no” answer, a tick or a cross, or a slider ranging between “does” and “does not”. This approach provides little or no scope for nuances, explanations or context.

E.g. Has “X” consistently met their targets? No.

Maybe the targets were unrealistic or there was a lack of support from their manager or other teams they were relying on. And perhaps “consistently” has not been defined and can be easily (mis)interpreted.

Performance matrices

Similarly, pigeon-holing someone into a square in a 3 x 3 box or other matrix is typically a bad compromise.

E.g. Tell me more about “Y”? They’re an “underperformer” with “low potential”.

The need to identify and theoretically encourage/reward ‘stars’ and try to manage out (or even ignore) the ‘plodders’ means these kinds of approaches have flourished. Unfortunately, they completely rely on the person making the assessment and their ability to make what can be career-changing (or indeed career-breaking) assessments on an arbitrary (6-monthly, annual or otherwise) interval – often without any other knowledge, skills and tools.

And these matrices can also sometimes be used to identify ‘leadership potential’ – opening up a further opportunity for the scorers’ own biases which may hold back great leaders who have different styles and approaches.


Spreadsheet bias

While everyone loves a spreadsheet(?), that doesn’t mean it should be the primary, or only, tool used to inform decisions about an individual’s future potential and value. While sometimes necessary, and indeed tempting, in order to normalise and compare data, it’s often become a trap that organisations find almost impossible to escape.

A number in a cell can't tell the story of an individual's performance throughout a year, nor accurately reflect or attribute the factors which might have affected their performance.

Give me an example of…

While a step on from the ‘scoring’ approach, asking your whole organisation to fill out a handful of open text boxes to demonstrate ‘Teamwork’, ‘Innovation’ or [Insert your own values or key areas] is still likely to come across as a ‘tick box’ exercise for everyone involved

It’s hard for many people, especially if they’re not naturally creative writers, to try to encapsulate a year’s work and distil it (assuming they can remember everything they did over the last 12 months) into responses which are likely to be still given a quasi ‘pass/fail’ when their line manager reviews them.

It’s also challenging for managers to decipher the output from each individual as everyone approaches things differently.

Even when “What project/success are you most proud of?”-type questions are used, it’s still incredibly arbitrary and potentially favours those who have been involved in successful and significant/flagship projects rather than those working in less grandiose roles.

It’s true that these types of questions generate words which someone can later refer back to as the reason someone was or was not rewarded in some way. But they do little or nothing to highlight or facilitate career development or nurture an individual’s feelings of being valued by their organisation.

You “meet” expectations

The idea that someone's contributions to their organisation over a whole year can be boiled down to “You meet expectations” is shocking. However, it is all too often the short version of someone’s performance review and the basis for whether they're rewarded.  

Employee: “I think I exceed expectations.”
Manager: “Well, I think you only meet them.”
#End of conversation.

Where’s the opportunity for a conversation? Where’s the tailored consideration and advice for the employee regarding how they could/should improve?

I would argue that this is likely to cause resentment over time and cause a significant proportion of people to take a step back, especially of those who fail to excel in this measure.

Someone recently described the overuse of measurement of performance “against [vague and often discretionary application of] expectations” as “toxic” for them, especially when it's the primary yardstick for pay rises or progression. I agree with their sentiment that this approach is “untenable and unsustainable” for organisations who wish to truly motivate, engage and support their people. 

I believe, the reality is that the manager or the subject of the review often has no clue how they can constructively take the conversation further and what a structured and consistent way to do this would be. Why? Probably because neither person has ever experienced it from their managers in the past.

Let’s focus on: What didn’t you do well?

This is something that really resonates with me and my past experiences of managing people. Most organisations still have some focus on perceived negative performance elements; “what’s NOT working”, “what AREN’T you good at”, or “what DIDN’T you do well”.

There often seems to be a conscious, or subconscious, lean towards ‘fixing’ issues. And there’s no specific focus on recognising what isn’t working optimally or where someone struggles – and what might be behind this.

This can be an incredibly negative experience for some people, especially when the same issues recur on a yearly basis.

I know someone who had more than two decades of annual performance reviews that kept singling out the same thing ‘they weren’t good at’ – even though it had little or no impact on the success of their role.

When life gives you lemons, make lemonade

Make the most out of the people you have.

No, of course, they’re not lemons, but they’re the people already within your organisation; they’re already invested, and there's a good chance they’re not going anywhere anytime soon.

There’s no quick fix, and often organisations spend inordinate time and energy searching for ways of making things more efficient and effective. They deliberate about changing organisational structure and re-imagining roles, etc. when more effective coaching and managing of their existing people would be much more time and cost-efficient. (Caveat: that’s not to say organisational structure, etc. shouldn’t be reviewed and changed at times.)

While many business 101s may tell you to write a job description and hire the perfect candidate, the reality of running an organisation is very different. There’s typically no perfect candidate for any role, or certainly not at the time you’re looking, and often you need to look to your existing resources.

Arguably, one of the great things about life is that things keep changing. But you need to take your people with you and help them grow and evolve with your organisation’s challenges and opportunities.

The opportunity for all organisations and managers is to help harness the people and teams they have, to identify openings for people to grow and move with (or even outside!) the organisation. Even people who may have left will appreciate the support and growth they’ve experienced and will become advocates for you and may even return in the future.

You may end up helping your people develop and giving them the skills and confidence to move beyond your organisation. While perhaps initially counterintuitive, the inverse is that they may not develop skills and confidence, and they’ll remain (in the true sense) underperforming and unfulfilled members of your teams. (I know which one I’d rather have.)

It’s a privilege and responsibility to lead people. The need to be able to coach and mentor on an ongoing basis is key to being a successful facilitator of growth and collaboration within your team. It also engenders the trust and respect of people who feel you are genuinely interested in their career development, personal wellbeing and success.

What’s the alternative?

The alternative is wasting the potential of your most valuable resource and creating a culture where people’s potential is not fostered and their self-fulfilment is not prioritised.

It’s having good people leave or, arguably worse, quietly quitting.

And it’s not being the organisation or manager you should be and fulfilling the opportunities to lead, coach and mentor people to get the best from them and help them fulfil their own potential.

Ok, what’s the snake oil?

Sorry, but I’ll say it again: there’s no quick fix.

Organisations need to buy into a different way of measuring performance and realising people’s potential. This starts with giving managers the tools and training, but also the ongoing support to be great coaches and mentors (which doesn’t come easily to everyone and is a journey that should never stop).

Of course, we have views on how you can start tackling this, but there are lots of ways organisations can approach this with or without external assistance.

Please do follow us for more insights, guidance and events focused on helping individuals, teams, and organisations harness their people’s strengths.


*Obviously, not literally everything, but I’d say there’s significant room for improvement in most organisations. (And I’m holding my hands up, too: there were things I should have changed and could still change now – I’m committed to keep improving!)

Related Articles