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Less Judgment, More Understanding: Rethinking the Performance Evaluation

April 23, 2024 5 min read
AI generated image of a man and woman standing side by side with a grading dot scale in front of them

Why are performance evaluations so disliked? Managers hate them (at least they do at every company I’ve ever been involved with). Team members hate them. The entire process is uncomfortable and difficult.

And yet most of us would admit that we need some way of evaluating performance. If you care about growing your people and improving as a collective unit, you must at some point, in some way, assess your teammates. Any process that involves judging and ranking people is likely to be emotionally loaded and awkward, but it strikes me that something so important to individual careers and organizational success should not be so despised.

What are we missing? Can’t we find a more impactful and less painful way to do this?

Individual performance is only half the picture

To answer that, start by understanding the bias that most companies fall into. Almost every “people performance” discussion begins, and often ends, with an assessment of the person’s activities, contributions, and impact. Essentially, you are trying to understand their value to the team and the organization by asking the question: How well is this person doing their job?

That is the lens through which we tend to view performance, as the measure of the impact and efforts of the individual. But when you step back, you realize that teams are not simply collections of individuals. They are complex living organisms, rife with interdependencies and unspoken dynamics, that operate and perform together. So when we choose to assess performance at the individual level,  judging each person on their own as opposed to in combination with others, we are making a specific and possibly limiting choice.

We need to see this for what it is: A systematic bias in our thinking. We tend to overweight the individual element and underweight the criticality and impact of the team and the environment.

Part of what drives this bias is the inherent tension that comes from asking leaders to rate their people. If an employee is seen to be struggling, it is much more comfortable for their management to put their challenges down to the failings of the employee rather than to engage in a harder, more self-critical examination. “They just weren’t getting it” is an easier message for many managers to deliver rather than “I didn’t support and guide them well enough.”

There is no easy way to escape this bias… but there are things we can do, and questions we can ask, that help shift the picture. One tool I love is the “Five Whys” approach that Sakichi Toyoda introduced at Toyota, which focuses on uncovering root causes rather than making superficial judgments of praise or blame.

If, say, a car rolls off the assembly line missing a part, say, it’s easy to lay the blame on the employee who was supposed to put it in. It was their job, after all… and they missed it! But if you take the “Five Whys” approach and look beyond the surface, you might determine that the employee never received sufficient training. Keep digging and you might decide the mistake could have been avoided if a visual reminder was placed at the employee’s workstation, or if teammates were asked to check each other’s work, or if any other number of other changes were made.

The lesson is simple but profound. Anything that happens on a team, whether positive or negative, is at least partially influenced by many factors beyond the individual. And yet that interconnectedness rarely shows up in performance reviews.

Imagine two employees…

To see why that can be a problem, imagine two employees are hired into your company. They have similar backgrounds and experience levels and start at the same time. One is placed on an established team under a seasoned leader, where he is supported and mentored by friendly, collaborative teammates. The other lands on a team headed up by a new manager, and finds herself working with colleagues that have little time or interest in helping to guide her.

Six months later, it’s time to review and rate their performance. The first employee seems, by every metric, to have been more productive and effective. His measurable output is greater, his stakeholders rate them more highly, and his manager is more enthusiastic about their impact. The other employee showed some progress and received some positive feedback, but seemed to struggle to consistently meet the needs of teammates and deliver results.

Is the first employee simply more capable and hard-working? Or was the difference between them primarily down to the stark contrast in their leadership and team dynamics, so much more favorable and supportive in one case than the other?

The answer comes down to which element in the equation of performance matters most. The effort and talents of the individual? Or the support and structure of the organization? Clearly both matter… and yet we tend to orient our rating and evaluation systems heavily towards the first.

Of course, this is an extreme example; the reality of comparing any two employees is likely to be much more nuanced. But it helps illustrate why the philosophy that guides our current thinking about performance is so limited.

Evaluation should work both ways

Of course we should examine the individual, but we should also examine and assess the environment in which they operate. This means shining a spotlight on the context and conditions of the team and the organization and changing anything that needs to be changed.

As managers and leaders, this means stepping from the relatively safe role of evaluating others into the much more vulnerable one of evaluating ourselves. What are the cultural expectations that we set for our teammates? What do we celebrate? What do we penalize? Are we setting clear priorities and policies? How do we react to perceived failures or misses? How do we support, teach, guide, and develop them?

These are big, vital questions… and ones that get little if any real airtime or discussion on most teams. Most leadership teams spend hours talking about people and have lots of process and infrastructure around that work, but very little time or intentionality around assessing and improving their own environment. That needs to change.

If you create the time and space for that discussion, you might be surprised by what comes up. At one company I worked at, we started to see unexpected delays and missed deadlines. Everyone would self-report that things were on track at our status meetings, but then we would see a surprise slip in the schedule. It would have been easy to see this as simply a failure of personal accountability on the part of a few employees.

After asking enough questions, however, something interesting emerged. In our meetings, we would ask anyone who thought their work might hit a delay to raise their hand. But we hadn’t thought about the social and reputational stigma associated with admitting that in front of all of your teammates. It was strong enough that most people wouldn’t do it, even if they had secret doubts about their ability to deliver. So we had unintentionally created a process and experience that limited real feedback and encouraged people to hide, rather than share, information.

If you spend some time with other managers and teammates exploring these questions, you will likely find plenty of opportunities to improve like this. When you focus less on doling out individual grades and more on understanding, you can get a better understanding of both your people and the environment that you all work in together.

The bottom line when it comes to performance assessments is clear. We need a little less judgment and a lot more understanding and compassion. Most of all, we need to examine all sides of our environment and culture. Stop thinking so much about ranking people and more about how you can collectively make everything, and everyone, work better together.

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Jason Li is Ironclad’s VP of Engineering. Before joining Ironclad, he was the VP of Engineering at SalesforceIQ and Grovo. He holds a B.S. in Electrical Engineering and Computer Science from U.C. Berkeley and an M.S. in Electrical Engineering from Stanford University.