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.