Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
There is no pleasant way to be fired. But imagine how much worse it must be to get the sack as your employer declares it is axing poor performers.
For thousands of workers this year, no imagination has been needed.
Meta’s Mark Zuckerberg told his staff in January he had “decided to raise the bar on performance management and move out low-performers faster”, a move expected to eliminate about 3,600 jobs.
A short while later, workers caught up in the Trump Administration’s sweeping purge of federal employees received termination notices saying “based on your performance . . . you have not demonstrated that your further employment at the Agency would be in the public interest”.
This week in the UK, ministers said they were going to make it easier to force out underachieving civil servants on the grounds that Whitehall is currently “not match fit”.
These moves are not strictly comparable. The US federal mass firings were so rushed and chaotic that some departments have been ordered to temporarily reinstate people amid claims that rules were ignored.
The UK government plans a more measured approach of tightening up performance monitoring and giving senior staff deemed to be mediocre six months to improve before facing dismissal. Meta’s clear-out is also likely to be more calculated.
Yet each case raises a question that remains surprisingly hard to answer: how do you know if someone is definitely a low performer? Put another way, how does a company know it is dismissing people it really wants to lose?
You might think this would be obvious by now, considering how long employers have been using some form of performance review system.
As far back as the 1940s, about 60 per cent of US companies were using appraisals to determine staff performance and pay and by the 1960s, experts say it was nearer 90 per cent.
Last year, 49 per cent of US workers surveyed by software group Workhuman said they were being reviewed annually or biannually, while another 38 per cent had more frequent check-ups.
There is no mystery about why reviews remain so prevalent.
Employers want to check the shape and fitness of their workforce. Employees want a sense of how well they are thought to be doing and how they can progress.
The trouble is, good performance management requires the time and attention of managers but cost-conscious companies are increasingly thinning them out, a process now known as “unbossing”.
This is one reason why even carefully designed assessment systems struggle to fully capture the performance of every worker.
That in turn helps to explain why reviews continue to be fantastically unpopular.
Employees think they are unfair and unhelpful. Managers find them unreliable and colossal time-eaters.
Deloitte once overhauled its evaluations after discovering the organisation was spending nearly 2mn hours a year on a performance management system producing rating scores that revealed more about the raters than the rated.
Even HR bosses have qualms. Only 2 per cent of chief human resources officers in Fortune 500 companies are convinced their performance management system inspires their employees to improve, Gallup data showed last year.
Overall then, it is hard to feel confident that every business declaring it is going to sack mediocre staff will get it right.
Frustratingly, the incompetent are easily identifiable to those doomed to work alongside them. Their work is shoddy. They steal ideas. They miss deadlines. They never own up to mistakes or learn from them.
All too often, these people either suffer from delusions of adequacy, or worse, are adept at convincing higher-ups they are irreplaceable.
The 360-degree review based on anonymous feedback from peers and junior colleagues, not just managers, is supposed to address such problems.
Alas, it too can be imperfect. Juniors fear retribution. Peers dislike dumping on colleagues. And poorly designed systems can be gamed as back-scratchers do deals to praise one another while back-stabbers torpedo rivals. I know a lot of managers who nonetheless swear by such assessments, which they insist can be done well.
Some companies have ditched traditional reviews in favour of continuous monitoring and feedback. That should in theory be better than less frequent check-ins but again requires time that too many managers lack.
Ultimately, performance reviews seem doomed to be a work in progress. That is small comfort to anyone working for an employer determined to sweep out low performers.
Read the full article here
