{ in·deed·a·bly }

adverb: to competently express interest, surprise, disbelief, or contempt


Recently I was performance appraised. A curious ritual in the world of permanent employment, where a boss sits down with a minion and formally reviews their performance over the last calendar year.

Having spent the last several decades running my own business, I was intrigued by the process. For me, every day had been a performance appraisal. If the client liked the work I was doing, they may invite me back the next day. If they didn’t? Well, let’s just say that solving the client’s problems would no longer be my problem.

Which raises the obvious question about why annual performance appraisals are a thing?

Do employers really tolerate underperformance for up to a whole calendar year just so they could deliver the message during an appraisal?

Were praise and advancement similarly withheld until that one fortuitous day in the calendar year?

I didn’t think so, but having seen how bizarrely some of my former client’s ran their businesses over the years, I wouldn’t rule it out as a possibility.

There is an often-repeated tale that the outcome of a performance appraisal determines the size of an employee’s non-guaranteed non-recurring annual performance bonus. This may (in part at least) be true. What few appreciate is that it is not their actual performance, but rather the outcome of the ritual that contributes to that arcane display of financial black magic. The two are not the same thing.

Years ago, I suffered the misfortune of working for a large investment bank. Operating an infamous cutthroat working culture that was fuelled by caffeine, cocaine, and gladiatorial corporate politics.

Their method for allocating performance bonuses was simple.

Starting at the top, the big boss would claim half the bonus pool. This was the stuff of those famed multi-million dollar performance bonuses you read about in the gossip sections of the financial press.

The remainder they allocated amongst their direct reports. Each underling would skim off half that allocation in turn, passing the remainder to their minions.

This “take half and pass it on” method cascaded down the corporate ladder, until eventually, there might be enough left to buy the lowly peons at the very bottom of the org chart a happy meal.

But how were those allocations determined I hear you ask? Each line manager would rank their minions from best to worst. In a corporate homage to Charles Darwin, the bottom 15% were terminated on the spot, irrespective of how well they had been executing their designated role.

To survive you don’t have to be the fastest, just not the slowest. “Devil take the hindmost!

The survivors were allocated a proportion based upon their ranking.

Those ranked near the top received a lot. Those ranked near the bottom received a little.

Rankings had little to do with actual job performance, and a lot to do with subjective factors.

Which was good for the brown-nosers, sycophants, and toadies. Attaching their lips firmly to the backside of a rising star, hoping to ride their coattails on the ascent up the ladder.

Less so for those faithful few who still believed in a meritocracy, having not yet had the naïvety beaten out of them by the harsh realities of the real world. Life isn’t fair, get over it.

The performance appraisal methodology applied by my current employer was no less flawed, just slightly less honest.

In theory, each employee had been set performance objectives at the beginning of the year.

Providing guidance on exactly where their individual financial interests and priorities lay.

Curiously, those objectives were not allowed to be project delivery related. The thinking went that success or failure of a project was outside the control of any single employee, subject as they were to externalities such as the whims of the dependency, resourcing, and prioritisation gods.

This assumption of pre-existing performance objectives proved to be unfounded. I was blissfully unaware of the need for any. My ever too busy boss had forgotten to define them. Oops!

Which made the conversation somewhat brief, but no less comedic.

We proceeded to make them up on the spot.

The appraisal process required the employee being assessed to evidence their achievements. So I quite reasonably suggested objectives that matched up nicely to what I had actually been doing.

Which naturally meant that I got perfect marks across the board. Had the process operated as advertised, I might have expected to receive a gold star or a participation trophy.

Except life is full of disappointment.

My boss explained that human resources had instructed line managers to grade each objective on a three-tier scale equating to amazing, average, and goodbye.

Under the grading scheme, amazing represented perfection personified. No room left for improvement.

Goodbye represented unacceptable performance. In a firm that prides itself on moving fast and not tolerating passengers, goodbye meant what it said on the tin.

Which left average to cover the entire gamut between those two extremes.

This year, managers had been instructed not to award anyone the amazing tier. Doing so may set unrealistic expectations of salary increases or advancement. During these troubled times and uncertain trading conditions, that was deemed to be unwise.

As my poker-faced and deeply earnest boss explained the process, I raised an eyebrow and gave a wry smile. They misread my expression for one of concern, hastening to reassure me that while I may have been marked as “average”, I was in reality “perfectly average”. I should take great pride in that, it was quite an achievement.

When my boss attempted to submit the now complete electronic appraisal form, their computer borked. An error message flashed across the top of the screen objecting to some missing mandatory information. We scrolled down the form to find a box highlighted with an angry red border and an exclamation mark that attempted to convey importance and urgency.

The label read: professional development. The helpful onscreen prompt asked what I needed to work on to address the shortcomings which had prevented my scoring amazing?

I looked over at my boss and raised the other eyebrow.

They blinked. Gold fished. Scowled. Swore.

The ridiculousness of appraisal theatre finally cracking their thin veneer of professionalism.

We spent ten minutes batting suggestions for shortcomings and solutions backwards and forwards. Something innocuous and inoffensive. Development that would not be onerous or time-consuming, I was already thinly spread across far too many projects as it was.

Eventually, my boss had an epiphany.

I hadn’t done any training since I had joined the firm. That was a shortcoming.

The way to correct it was to do some training. What did I want to learn? It could be anything I liked. Providing it did not require attendance in person, because I was too busy. Nor could it require a large investment of mental capacity, because they wanted my focus to be on the job at hand. Nor could it take very long, because all professional development had to be completed by the end of the calendar year in time for the beginning of the next performance appraisal cycle.

Which is how I found myself sitting through an excellent Udemy course containing 27 hours worth of video at 1.75x speed. All so I could pass a certification exam for a qualification I didn’t really want, that is supposed to take the best part of a year to prepare for.

Yet another ridiculous thing we subject ourselves to, in the vague hope we may receive one of those non-guaranteed non-recurring entirely discretionary annual performance bonuses!

Which raises the uncomfortable question of how we objectively appraise our own performance?

Except for a lucky few, a quick cost-benefit analysis would reveal that the numbers involved in chasing performance bonuses rarely stack up. Our efforts would be far better spent investing in ourselves to maximise the marketable value of our time, allowing us to secure higher recurring non-discretionary remuneration for the scarce time that we choose sell.

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  1. Gnòtul 17 December 2021

    Amen, Indeedably!
    Thank you for this piece. I believe most companies have their own version of “perfectly average”… Facepalm. 🙂
    Your last paragraph is particularly spot on.

  2. Fire And Wide 17 December 2021

    Ha ha ha – such a familiar story to hear, from both sides of the fence. I am so glad I no longer have to go through those.

    I always remember my first year in so-called senior management and seeing first-hand how the process worked. Which was pretty much the same as your old place it seems. Eye-opening indeed. And not easy to explain to my team. The following year I spent much more time making sure everything they did was “visable”. Rubbish but every little helps….!

    My old boss & I got it down to a fine art though. We’d book the required slot in the calendar and label it appropriately. Amazingly it was always for the last couple hours of the day – and was held in one of the fine real ale establishments nearby ?. 5 min of “I did some stuff, great thanks” before moving on to way more interesting and useful things.

    Must have been a weird experience sitting through one of those again after that long for sure. Congrats on being perfectly average & enjoy your well-earned festive break!

    • {in·deed·a·bly} 17 December 2021 — Post author

      Thanks Michelle, your approach to conducting performance reviews in the pub is an inspiration to us all. Should become industry best practice!

      Best wishes for the silly season, I hope you and your family enjoy much Christmas cheer.

  3. WildFIRE 17 December 2021

    So, this is the part I need to know, if you are an a position to never have to worry about money again and blissfully FI, why are you still working and subjecting yourself to the corporate world?

    As background, I’ve been through similar in various companies as both the employee and the manager as I’ve climbed the greasy pole over the last 24 years and I agree that unfortunately it is a bit of farce. I really enjoy my job, highly enjoyed in our products (offshore wind turbines) great flexibility, good T&C’s etc, but I’m probably going to reach the end of my tether in the next 5 – 10 years and am currently building to be FI by then. My concern is, I may be in the position that it sounds like you could be, that I chase this vision intensely then get there and decide that it was actually a mirage as I get bored pretty quickly without lots of mental and physical stimulation!

    • {in·deed·a·bly} 17 December 2021 — Post author

      Thanks WildFIRE, that is a fair challenge.

      My concern is, I may be in the position that it sounds like you could be, that I chase this vision intensely then get there and decide that it was actually a mirage as I get bored pretty quickly without lots of mental and physical stimulation!

      Firstly, to bust a myth: I was quite content and rarely bored during my seasonal semi-retirements.

      That said, the absence of external stimulation was something I was conscious of. As I relaxed and unwound each time, I would notice I lost that mental sharpness that comes from constantly having to use my brain. My attention span also suffered, resulting in my flitting between many activities rather than being able to settle down and focus on just one. Whether this was a common problem, unique to just me, or just allowing laziness to win more often than I should have done is probably best left to the reader!

      Returning to the fray, the old survival skills would quickly kick back in. The sharpness, memory recall, and renewed attention span all swiftly returned. So too would the less desirable aspects such as Sundayitis, shoulders like rocks, broken sleep, and the uncomfortably restless feeling that comes from spending too long at a desk staring at a screen.

      if you are an a position to never have to worry about money again

      That is one big “if“! I am comfortably well off. By that I mean I have more than enough such that I no longer worry about money. Indeed, in my day to day life I rarely think about it, the days of pondering whether I am willing to afford something are (for the most part) long behind me.

      But here is the thing: that isn’t because I’m rich, but rather because my expectations are broadly in line with my means. The question of affordability only arises when our desires exceed our financial reality, resulting in an opportunity cost decision. That only goes away once we are content with what we already have and the lifestyle we already lead, no matter what our net worth happens to be.

      and blissfully FI,

      I could be financially independent in about 95% of the world, but ironically not where my family currently resides. A time bound challenge, that will resolve itself once my children age out of the schools they are happily settled in and surrounded by a good group of friends.

      why are you still working and subjecting yourself to the corporate world?

      The short answer is as a hedge.

      Financial plans are all about taking the happy path, while minimising or managing those downside risks that are perceived and assessed as posing a material threat. It is why we take out insurance, contribute to pensions, and maintain emergency funds (though the need for the latter is inversely correlated to the size of our accessible net worth).

      Occasionally, an immediate threat will present itself that had not previously been on our radar, nor factored in our plans. Sometimes something new. Other times something that had been hiding in plain sight, that in hindsight we had been wilfully ignorant of.

      In my case, just such a threat appeared. While it remained a risk, my preferred lifestyle of seasonal semi-retirements and spending the summers hanging out with my kids was sustainable.

      Should it materialise into an issue however, then I would find my net worth reduced by a material amount, cruelling my passive income streams at the same time that my outgoings would significantly increase.

      Once seen, some things cannot be unseen. In such cases, it would be naïve to the point of folly were we to fail to adapt our plans and adjust our expectations accordingly. Once again, the threat is time bound. The potential blast radius steadily reducing over the next few years, to the point where I would be able absorb the impact without materially compromising my financial future.

      • weenie 22 December 2021

        I thought you were back at work cos the missus wanted a bigger house? Or was that from some other blog? Sorry if I’m mistaken!

        • {in·deed·a·bly} 22 December 2021 — Post author

          My lady wife does indeed covet a large house in a posh suburb. Alas, a new abode could never hope to magically cure what ails a relationship that has all but run its course. At best it would be a short term patch, but never a long term cure.

          The job keeps options open, as similar sorts of checks are required to secure a mortgage or rental accommodation. Neither lenders nor landlords are particularly reassured by the prospect of a semi-retired amateur blogger pitching up on their doorstep asking them to take a chance him because he is a nice bloke whose home life is falling apart, but who once long ago earned a decent living.

  4. Bb 18 December 2021

    This resonated!
    The promotion and comp decisions in banking dont even reference the self assessment people do… once folks realise this it actually takes a lot of stress out of the review itself as the people both sides of the table know that it’s really just for show.
    A good manager should therefore:
    1) be giving really good direct feedback all the way through the year
    2) making sure this is at least about how their staffer is being perceived/how well they are getting their name out amongst the people that will force rank them
    3) make sure they’re not the guy who is getting chopped – their peers will pretty much disregard their representations about their staff
    If your boss isnt doing this (you should be able to tell, you should also not be scared to ask) then you should move. (This is perhaps a bit banking specific…)

    • {in·deed·a·bly} 18 December 2021 — Post author

      Thanks bb. You offer some sage advice there, the Darwinian specifics might be banking focused, but the guidance on good managers providing regular feedback is universal. We all suffer from a blind spot where we don’t know what we don’t know, so if our boss isn’t telling us what isn’t working, what to do instead, and what to keep doing then it becomes very challenging to adapt, change, and grow into a more value-adding team member.

  5. Sara 18 December 2021

    This is exactly how it works in the NHS too. Except that there you won’t get a pay rise (and your only bonus is Boris the idiot telling you 12 hours beforehand that you have to do twice as much work in same time).
    I hate them – both doing them and receiving them – they are so pointless. Make up a few objectives, tick an online box, forget for another year – or in my case spin out the next one until you get told off – on the basis that the longer I can hold out, the fewer I will have to do in my working life.
    It’s this stuff that makes me want to leave work. The actual real work I enjoy but all the appraisal, values, HR, Organisational development doo doo can take a running jump!

    • {in·deed·a·bly} 18 December 2021 — Post author

      Thanks Sara. That sounds like a crazy system for a non-profit where there aren’t any profits to share amongst the staff. Keep resisting!

  6. steveark 18 December 2021

    I gave a lot of those appraisals as the boss but I also handed out praise and suggestions every day to my department and then later to my direct reports when I was running the company. The written appraisals were pretty useless because I knew exactly how I ranked each person based on their performance. As far as raises and bonuses I did get more than the people who worked for me but not a lot more, certainly nothing like half the pot. And at our company everyone, even the newest admin clerk, got stock and monetary bonuses based on company profits. I really liked that everyone had some incentive to help the company make more money.

    • {in·deed·a·bly} 18 December 2021 — Post author

      Thanks Steveark. Aligning the individual’s financial interests to those of the company is a great, yet strangely underutilised, approach to try and get everyone pulling in the same direction.

  7. BeardyBillionaireBloke 18 December 2021

    gave a rye smile

    Instead of a wry smile?

    I remember getting a 2 (on the 1-5 scale) for my technical work not causing disruption. I asked what miracle I’d have to do to get at 1 in that category and the person delivering the information had the same thought.

    • {in·deed·a·bly} 18 December 2021 — Post author

      Corrected with thanks, BeardyBillionaireBloke.

      If you weren’t causing some disruption perhaps your technical work didn’t make enough of an impact to be notable? Perhaps the secret was to have a real clanger one year, then a comparatively unobtrusive one the next. Sets the bar low, making exceeding expectations easier. Game the system! Your mileage may very.

  8. Ward Just 19 December 2021

    We have the 5 expectations: significantly exceeds, exceeds, meets, partially meets and does not meet. Management only has so many above average to give out so they look for good homes.
    In my career, I‘ve heard most
    – You‘d need to be hiding things from me in order to give you significantly exceeds…
    – We pay you more, that’s why we expect more…
    – It was a difficult year, no one’s getting above meets…
    – It was a great year, but it was driven by market forces, no one’s getting above meets…

    Definitely mixed feelings with the process. Our new system stipulates that you must give yourself a self-assessment first. Get a little overconfident, you are the lying poser. Too modest, you get stepped on all over.

    Best having a boss who is aware, has significant experience or is willing to listen to those that do, clears the barriers in order for you to do your job, doesn’t unmotivate. Most come in motivated.

    Working for Megacorporation means embracing it: ambiguity, employee merry-go-rounds, employee reductions, phone call firings, being only a cog in the big gearbox, mega patience, hope that your direct boss is not histrionic, and that the team leading the company are experienced businessmen with a real interest in moving the company forward. That being said, big companies can be exciting! See the world, have the opportunity to work on big, interesting projects where size, entrenched market, footprint equals competitive advantage.
    Not quite ready/able to hop off my current bandwagon. When I am, I hope that it will be me to decide! If not, I’ll be fine anyway. Gonna go light a candle right now!!

    • {in·deed·a·bly} 21 December 2021 — Post author

      Thanks Ward Just.

      I’ve long been skeptical of the self-appraisal. Anyone who doesn’t automatically give themselves full marks every time is scoring an own goal. If the self-ratings contribute at all towards the overall outcome then the modest and the humble have left money on the table. If not, then they are meaningless so no real harm is done in blowing our own trumpet.

  9. JBL 20 December 2021

    Ah the dreaded appraisal system – I recall upper management explaining that a higher rating one year raised the bar the next year and meant having to do even better next time to make that same grade. Defies logic, I gave appraisals and received them and for the most part felt they were a waste of time and more likely than not to demotivate. Its not a surprise a lot of this came in after the credit crunch when staff and bonuses were being cut. We had a much happier more motivated workforce before then with almost no turnover of staff moving to (hopefully) better environments.

    • {in·deed·a·bly} 21 December 2021 — Post author

      Thanks JBL.

      I think it has been widely forgotten that an employee’s salary is what they get paid for performing their function competently and adequately. Bonuses should be thought of as a windfall, much like a lottery win or inheritance. Anyone who believes they are “owed” one is setting themselves up for a lifetime of disappointment!

      Somewhere along the way, they appear to have become viewed as an entitlement. So much so that that it is not uncommon today to see “15% performance bonus” advertised in the benefits section of an employment package alongside annual holiday entitlement and workplace pension contributions. That said, half the entitlements advertised are as the result of employment laws rather employer largess!

  10. JBL 21 December 2021

    You make a good point about the sense of entitlement. Moving from an environment where there are no bonuses, ever, to one where bonuses are the norm changes a person’s perspective. However, for me the issue is with the appraisal system itself and how its done or applied. There is a lot of nonsense speak out there and far too much focus on ratings, which can create an unhappy environment and result in churn of staff. When you work with very able inately motivated people who always strive to do their best and improve in any case, the system can demotivate.

  11. David Andrews 21 December 2021

    I’ve always been very cynical of the appraisal process. In previous jobs the process became rather combative. I knew that a needs improvement rating would be unlikely as it would reflect badly on my manager and an outstanding would be either unattainable or simply not worth the effort.

    I appealed a couple of ratings and won simply because I knew the process better than my manager. SMART objectives make me shudder and I’ve often simply refused to agree the set objectives. Once I became largely FI a lot of the work nonsense became less tolerable.

    • {in·deed·a·bly} 21 December 2021 — Post author

      Thanks David. Well played for gaming the system, hopefully that didn’t win you a reputation for being “difficult” the next year!

      I think financial independence affords a certain luxury to step back and see the rituals for what they really are. We got paid a salary to perform our role, a job we shouldn’t have accepted if we weren’t happy with the base remuneration package that came with it.

      If we happen to receive a bonus, great. Nobody deserves one. Nobody is entitled to one. Nobody should expect one. Which is a good thing, given how much corruption and nepotism is involved in their allocation!

      For mine, bonuses should be used to reward outstanding achievement by exception. They lose meaning when everyone finds one in their cornflakes packet at the end of the year.

      Stevearks’s firm were on the right path by allocating equity to staff, aligning their commercial incentives with those of the firm’s owners.

      • David Andrews 24 December 2021

        Thanks for your response. My reputation for being “awkward” was previously won (several years ago) by telling a senior manager that I wasn’t obliged to accept a change in my contract that would have made me materially worse off despite their insistence. That particular meeting got quite “heated”.

        It also transpires that 50% of my team have now handed their notice in over the past month. Perhaps it’s time to try out some early retirement myself.

        Enjoy the holidays and best wishes for the future.

  12. The Accumulator 21 December 2021

    Very good piece, Indeedably. Completely chimes with my experience. The appraisal system was nowt but corporate performance theatre.

    My boss and I ticked the boxes together with plenty of wry smiles exchanged – then got on with the real work.

    Some good management advice I picked up along the way was simply to notice and positively feedback upon your team’s efforts as regularly as possible. People put energy into thankless tasks every day. But actually being thanked for those efforts can make a tremendous difference to an environment over time. Sometimes it’s the little things.

  13. weenie 22 December 2021

    Apart from an occasion to have a one-to-one chat with the boss, it is a pretty pointless exercise.

    Both at the last place I worked at and at my current place of work, pay rises and (discretionary) annual bonuses are linked to performance appraisals. If you don’t meet or exceed expections, then no pay rise or bonus. Whether it’s my actual performance or not, I don’t know – I’m not in a sales type role where you can easily measure success against targets, I only have ‘loose’ KPIs. My success is really that no one in the company complains that I’m not doing my job and that I’m not stopping business from getting done!

    During my career, I have on occasion been awarded the ‘amazing’ tier but most years, I was just ‘doing my job/met expectations’. Well done on your ‘perfectly average’, lol!

    All the best for Christmas and the new year!

    • {in·deed·a·bly} 22 December 2021 — Post author

      Thanks weenie. Congratulations on your amazingness being recognised! The remuneration game may well be rigged, but receiving credit where credit is due for amazing work from people who understand the impact of the contribution made is something worthy of celebrating.

      Merry Christmas and a prosperous 2022 to you.

  14. Q-FI 3 January 2022

    It’s been awhile since I’ve swung by a FI blog, and yours was first up. This absolutely cracked me up.

    Been through all the different iterations of the “annual review” over the years.

    I’ve been w/ my current company over three years now. Year one was the same review as yours, us making stuff up on the spot and filling out the form because the boss was too busy and didn’t care at all. Then the last two years we’ve done no reviews at all. Hahaha. My boss uses COVID as the excuse and no one has questioned him. Which I’m fine with. The year-end reviews have always been a waste of time in my opinion.

    Loved these lines, “financial black magic” and “fueled by caffeine, cocaine, and gladiatorial corporate politics.”

    Keep cranking them out bud. Always good stuff.

    • {in·deed·a·bly} 3 January 2022 — Post author

      Thanks Q-FI, thanks for stopping by.

      Hopefully the absence of the appraisal ritual had no impact on any performance bonus that may have been heading your way. In which case, that says it all really!

  15. sparkleb33 27 February 2022

    I thought I would do a bit of a FI blog binge and had to smile at this one.
    I, like many others, am sceptical of the whole process. I have been the employee and the manager. It was a nightmare to create appraisal objectives when they could not be based on projects (because they were being canned by external forces), could not be based on training (because there was no budget for training) and yet things needed to be set to ‘motivate’ the staff.
    The scoring systems preventing you from giving high praise because it didn’t equate to anything but demotivation for the employee. If anyone had the low scores, they are immediately put on performance review and had to walk the process for ejection from the company.

    When it came to pay rises, at one employer, the managers would sit in a room and they would draw up a ranking across a number of teams and then the 3 top people would get a pay rise, the rest nothing. Every year it was the same with the directors getting pay rises and bonuses and the rest of the staff getting this limited selection process.

    I do not miss them. In my last manager job I had to do 3 appraisals a month, every month. the job became boring and hateful. I did not like spending my time doing admin paperwork. I was so demotivated by it all I couldn’t wait to walk out of the door.

    • {in·deed·a·bly} 27 February 2022 — Post author

      Thanks Sparkleb33, it sounds like you’ve seen the performance theatre from all sides!

      I think bonuses should be unexpected, one-off recognition for individual staff who have genuinely done something spectacular outside the remit of the job they are already being paid to perform.

      Invented something.

      Had an idea for a viable new product line.

      Suggested an acquisition.

      Figured out a major efficiency enabler.

      Not just the day-to-day handle turning within the levels of acceptable incompetence we all work within, between the (not to be awarded) awesome ranking and the dreaded (only to be used when you want to get rid of someone) awful ranking.

      The common practice of advertising performance bonuses as part of a salary package is both deceptive and disingenuous. Not guaranteed, yet setting an expectation that every year there should be something. Yet those one-off moments of inventiveness are exceptional by definition, not something that can be bought in and demanded day-in-day-out.

What say you?

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