Performance reviews in large organizations are B***S***

This is a story of why performance reviews in large organizations should not be taken seriously.

Goals are not linked to strategic objectives

In large organizations, the goals of each manager are rarely cascading down from the strategic objectives.

It means that your boss probably doesn’t know how she is contributing to the overall goals of the company.

It implies that she does not know how to set objectives for her team, and hence the individual team members.

This is even more true for functional and project managers in a project-driven organization with a matrix structure.

The function superior has little grasp over your work if you’re deeply integrated into the project. The direct manager on the project has more influence on what you will and won’t do.

Value created is very diluted to connect it to a large company structure

Another aspect that is especially true for companies listed on stock exchanges, with thousands of employees, is the dilution of value created.

When it comes to implementing strategic objectives with 30000 employees, your value created is probably lower than 1:30000 of the total value.

I say lower since some of the key roles get more than average contribution by making important decisions.

On a project, if you’re a planner, what is the saving to the overall project cost that you contribute with? Or procurement?
If you’re on sales, or engineering designing a component of the product the company is selling, what is the value you generate?

We could argue that it is easy to measure for salespeople. But their work is the result of establishing an organization and making a world-class product or service. So it is not so easy to put a value tag on your work after all.

If it is hard to measure the value created for the easiest job, it will be much harder for all the other ones.

Hell to determine the value created in a performance review

Since it is so hard to see a manager who implements strategic goals into actionable objectives, and that your individual value is extremely diluted, it appears very difficult to hold productive meaningful performance reviews.

It’s awkward for the manager and the employee. It is a means of creating frustration and disappointment on both sides.

For the employee, hoping to get a raise based on performance, it makes it difficult to have a productive argument to defend her case.

And for the employer, it is hard to argue why she did not put proper goals in place in line with the overarching objectives of the company.

It is time for both managers and employees to push for more meaningful, SMART goals, that will lead to a productive discussion.

It is also time to remove the hypocrisy of negotiating a raise related to performance, when such performance is questionable whilst based on disastrous objectives.

Alternatively, you can choose to work for a smaller sized company that creates a large amount of value for its employees, and for which everyone knows how they will contribute to the success of the company.

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