Performance Management – Effective Tool to Kill Motivation

Individual Performance Management, or annual appraisals, or bonus based performance, or other similar names, are the Human Resources’ practice that, in a nutshell, evaluates employees’ individual performance, based on the annual goals set at the start of the year.

Each employee is given a grade/mark to carry for some time.


The practice, actually a whole process, focuses on individuals, having the feedback part as the essence of the process. Traditionally, once or twice per year, the managers collect feedback for each employee from his/her colleagues and then compile it. Frequently, the catch is that such feedback is painted with a predefined, so called, Gauss/bell-shaped curve, which represents a statistical distribution of grades/performances. The overall grades for employees are supposed to follow the pattern of the predefined distribution. This implies that the majority of people’s performances should gather around the mid values. It is like we send a message – ‘Perform in accordance with this curve, which tells that majority of us is mediocre?’

Perhaps this interpretation sounds like exaggerating or tendentious, but this is how people, to my experience, receive the message and in the end how it affects their motivation.

Here is the statement from frequently quoted agile guru – Mary Poppendieck:

“If you give a mediocre rating to a high performer, you will make them a mediocre performer. If you give high ratings to mediocre performers, you will continue to have mediocre performers.”

Aubrey C. Daniels (considered as a father of performance management) continues:

“Apart from documentation for legal purposes, the annual performance appraisal is a waste of time.”

The feedback that is immediate, related, direct and fair is important and wanted. Therefore, the annual feedback sessions do not justify the above mentioned attributes, and make a very little or no difference at all, to the change in one’s behavior. If the feedback is given once a year (which is considered very rare), it must also be comprehensive, where both positive and negative feeds are combined.

Sandwich As a manager, I was taught that feedback is like a sandwich: a slice of positive, then a slice of negative and then finish with a positive. However, Aubrey C. Daniels in his research further says that, when combining positive and negative feedbacks, the negative one largely diminishes the positive one. So, we were chewing on bad tasting sandwiches for a long time.


The culture of receiving an evaluation by those we report to, and giving evaluation for those we are accountable for, is so infiltrated into our minds (started with our educational system) that we feel lost without it. We feel without control and without legal instruments to judge. Hence, we keep preserving the power and decision making at the management level, thus killing the honest relationship. The sad part is that we created it mainly because of low performing individuals – people that due to some subjective or objective reasons do not perform in accordance to expectations. Is it worth (smart) to impose a heavy and demotivating process upon everyone in the organization because of the small number of underperforming people?

Another ‘tiny’ aspect to include in this story is the cost. We invest into the system that tracks the individual performance. The system is supposed to help managers to track. Think about the word ‘track’ for a moment! It means that we are after that something, behind. It’s a pretty good description of what the police do. They investigate and track criminals. However, the police are much more advanced in this thinking – they usually don’t track the good guys.




The leaders lead the people to perform; otherwise they don’t lead. So, how can they lead by looking at their employees back? Falling behind is waste, and waste costs. Defining the how-to-track process, building tools and maintaining them, having formal interviews, executing formal talks, policing people – cost money, time and resources. However, the biggest damage of all is – demotivation. If the system demotivates a single person – it needs improvements!

We need a change from evaluating people by their manager, towards a feedback shared among the team members. Who is better to give a feedback than the colleagues working with you on a daily basis? We should get rid of the annual appraisal harmful routine.

Loving Your Org… ups!

OrgPeopleLeaders must love their organization! (…getting crazy!)

I’ve spoken once to one of my peer colleagues, and we’ve both complained on certain aspects how “organization” was doing the things. We were partly correct in everything and about similarly wrong, as well.  He said in the end: “Well, I am not married to this company, so I have no problem to just leave”.He was maybe correct, but he didn’t leave. We are partners with our organization and as long as the partnership is satisfactory for both parties, we engage together.

After the talk, I felt guilty. Our chat added no value and time we spent was fairly wasted on complaints.

What is the organization? Who forms it and what makes it as it is? Who creates the culture and behaviors in it?

Even the organizational policies and mottos would say that people are our best assets, we usually don’t identify with such words, since there are so many signs and signals saying that the numbers are important – budget, headcount, charts, reports… We live/work in the organization of things.

This is how Al Michaud in his book “Mediocrity in ten easy steps” sarcastically explains forces that drag business and organizations towards mediocrity. The very few managers, according to Al, take the time and make the effort to talk with and truly understand people. Those who do this are marked as people persons and they are not best conducting themselves in the best manner to insure mediocrity.

Mediocrity doesn’t count today. Mediocre companies are sentenced to extinction.

Agile organizations are people-oriented. They fight mediocrity with collaboration and cultivation of people’s growth (please check the Empirical People Control post). They make people meaningful and work in the organization purposeful. Mediocrity hates those things.

Respecting and appreciating people, we love, respect and appreciate our organization. The good numbers, budgets, charts, and reports produced by these people are the consequence of this “love”.



All the policies, rules and processes are useful and meaningful if used to grow people’s knowledge, capabilities and motivation. As leaders,we make processes useful and we need to make sure that we improve them constantly. This challenge of improvement makes our organization agile i.e. it is our ticket out of mediocrity.

Mediocrity is a bad word, bad word!

Agile Transition and Transformation

MinfTheGapMarko, you are the transition” – well known statement in our leadership team when we were starting with agile. Our agile leader and coach was putting a lot of energy to drive our agile transformation and therefore he well deserved such an epithet.

However, the statement above reflects outsourcing or shift the burden mindset suggesting that someone else is driving and responsible for the change.What about the rest of us!? – Do we just continue to do the “work”?

So, thinking (or not thinking) about the transformation always reflects back to us as how do we make changes – how do we change ourselves, not just others and things around us.

Even though transformation may look similar to transition, to my view, it would be great to consciously make a difference. We usually use agile transition as a rubber to erase a particular terminology and to change some practices to the new ways of doing things. When we are done, we declare peace. Transition, as I would describe it, is a process that does not even need to be mentioned. It is a continuous effort. Transformation is on the other hand an effect of the transition and represents a vision where we would like to be and how closer to such a vision we are.At the end, it is just the terminology. The most important part is to go that road!

A while ago we had a small celebration – one of our managers was going to retirement (I hope I will be so vital during my retirement celebration party!). He has given a small speech looking back to his career and said:

I had two really big changes in my professional career – one was when we changed the technology from mechanical to electronic switching network nodes. We needed to learn everything from scratch.

The other, even bigger was transformation to agile”.

We actually never talked about it this way, but his career retro speech emphasized a magnitude of the biggest change in his 40 years of work. Even riding on the agile transition train for a few years, it was a moment to realize that our responsibility as leaders and our influence is tremendous. Why not use that chance!



While our transition is (or should be) a never ending journey in adopting and changing the way how business is done, transformation to agile mindset and how to become agile is rather a matter of setting it as a strategic organizational (and personal) goal. Please note, transformation of the organization to the agile one is a learning process, NOT an installation process.