Employee Performance: How Good Companies Dig their Own Graves

While leading a session on employee performance improvement, I argued that traditional performance evaluation systems hurt vertical progress.

One participant asked, “What is vertical progress?” 

 I explained, “Simply put, It’s the action of creating new products, processes, or services that increase a company’s market share, value, and influence. The iPod, Amazon Kindle, and PayPal are examples of vertical progress.”

 I repeated, “Traditional employee performance metrics do not promote vertical progress.”

A manager in the back of the room retorted, “But I have to hold my employees accountable.” He also added, “Using standardized templates and systems to rate performance establishes a fair process for everyone. Don’t you think?”

I replied, “I don’t think so. Putting all employees in the same box is a terrible mistake.” And I paused. Some people looked at me as if I came from a different planet. 

So, I explained myself by sharing the following insights. 

Two employee performance evaluation insights from two thought leaders

Without further ado, let’s dive in.

Insight # 1Tony Hsieh, CEO of Zappos, said:

 I think when people say they dread going into work on Monday morning, it’s because they know they are leaving a piece of themselves at home. Why not see what happens when you challenge your employees to bring all of their talents to their job and reward them not for doing it just like everyone else, but for pushing the envelope, being adventurous, creative, and open-minded, and trying new things?


Insight # 2-  The father of quality or the man who revived the Japanese economy from the dead after World War II— Edwards Deming  argued:

The merit rating nourishes short-term performance, annihilates long-term planning, builds fear, demolishes teamwork, [and] nourishes rivalry and politics. It leaves people bitter, crushed, bruised, battered, desolate, despondent, dejected, feeling inferior, some even depressed, unfit for work for weeks after receipt of rating, unable to comprehend why they are inferior. It is unfair, as it ascribes to the people in a group differences that may be caused totally by the system that they work in.


Insight # 3 Edwards Deming said:

The effect is exactly the opposite of what the words promise. Everyone propels himself forward, or tries to, for his own good, on his own life preserver. The organization is the loser. The merit rating rewards people that conform to the system. It does not reward attempts to improve the system. Don’t rock the boat. 


 In other words, traditional performance evaluation systems get in the way of a company’s progress. That is, it encourages employees to meet average performance standards. It creates average employees that do average work that leads to average products and services.

In conclusion, most traditional employee performance systems are punitive for critical and innovative thinkers, leading to companies’ stagnation and failure to innovate.

Please share this post with a smart friend or colleague that you care about. And don’t forget to sign up for our blog.

PS: A few posts that you might have missed:

The coach
Coach Teddy Edouard is a lifelong learner, public speaker, writer, blogger and vlogger. He is the founder of Coaching for Better Learning, where he helps people and institutions build systems that lead to lasting improvement, growth, and success. He also teaches professionals how to protect their careers and use artificial intelligence (AI) as a career improvement ally.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.


Yours Free

A Guide for understanding how systems affect your life and your joy.