Performance Reviews and Turnover (1) — Where Does the Distrust Come From
Apparently three out of four people say they're not satisfied with their review results. That got me thinking about a company where the HR team became the punching bag for everyone's frustration, and where a manager's subjective judgment, disconnected people-management, and the absence of clear criteria were all tangled up at once.
A while back I was watching YouTube and came across a video about performance reviews and turnover rates. It made a fair amount of sense, and when I mapped it onto the companies I've worked at, there turned out to be a lot worth thinking about.
The starting point that got me seeing both sides at once
I was lucky enough to start my career as a manager. "Manager" sounds nice, but early on my team was small, so most of my time still went to hands-on work. Endless meetings and reports, plus all the actual work on top of that — I had to handle it all. Naturally I started wondering how I could possibly do all of this well, and at the same time, whether I was even being paid appropriately for it. Back then, forget performance reviews — just getting through each workday was hard. Looking back, it was a company with barely any structure or decent systems in place.
If anything, it was precisely because the company had so little in place that I ended up thinking about things from multiple angles at once during that period, and that turned out to help me later in my career. That habit proved quite useful for working a bit more comfortably while still producing good results. Of course, my first job had enough problems that I ended up leaving early.
The structure that turns HR into everyone's punching bag
At one of the more recent companies I worked at, complaints about the HR team never let up. Almost every employee had some grievance against HR, and time and again, people would raise issues for various reasons, get into conflicts, and end up quitting. HR itself, for its part, kept having to change direction and patch things up on the fly at the direction of the CEO and executives, never getting a real chance to do its job properly. The video I watched this time laid out part of this problem quite clearly.
What the numbers say
According to the video, most employees these days don't trust their company's HR systems. The majority are dissatisfied with their review results, and feel that objective standards are either missing or seriously lacking.
Job changes, apparently, cluster between April and June. That's not surprising when you consider that reviews are usually conducted at year-end, with salary negotiations (or notifications) following in January or February. Seven out of ten people say they've considered switching jobs after receiving their review results — so it's only natural that performance reviews have a huge impact on working life.
Distrust, generally, comes from three sources.
- Evaluations shaped by a superior's subjective judgment
- Cases where people-management and evaluation outcomes are disconnected from each other
- Cases where no objective standard exists
The company where all three applied at once
At one previous company, an executive who'd come from a fairly well-regarded startup joined as an executive there too. Naturally, he wasn't an HR specialist. Claiming he was building rules for performance reviews and salary adjustments, he created a spreadsheet with scoring and formulas visible only to management, and used it to rank all the employees. Among the evaluation criteria was something as shocking as overtime hours — and naturally, the more you worked, the better your score. With no distinction by department or job function, every single employee was placed on one table and ranked against each other.
Each team lead filled out monthly evaluations for their team members, but those evaluations were barely reflected in practice. When it came time to decide raise percentages, HR itself was cut out of the process entirely, and for most people, adjustments were made by a handful of executives regardless of where they ranked. All three factors that breed distrust in performance reviews applied to this company at once.
Team leads' influence naturally eroded, and distrust and dissatisfaction toward HR kept growing. I once came across the "Simple Sabotage Field Manual," produced during World War II by the OSS, the predecessor to the CIA. It's a document collecting tactics for wrecking an enemy organization from the inside — things like referring everything to committees, nitpicking over minor wording, and reopening decisions that have already been settled. Watching that company, I thought it matched that description exactly. Quite a while later, that executive left the company, but it kept running in that same broken state regardless.
The direction is right — but will the people change?
The video cites various cases to argue that performance reviews these days are shifting toward 360-degree feedback and absolute evaluation. Ongoing feedback and documentation, explainable compensation, and evaluation centered on role and skill — that's the direction it points to. Looking at the good and bad cases I've experienced firsthand, that does seem to be the general trend.
Of course, whether there are organizations where that kind of change is actually being applied well is a separate question. They say leaders are shifting from being evaluators to being people who support growth and coaching — but how easily do people really change like that? Organizations, naturally, won't change easily either. On the surface, things will move toward whatever looks plausible and appealing, but in the end, it's the executives and leaders who need to change.
So how should leaders change? Can people actually change? This is running long, so I'm going to split it into two parts. That's as far as we'll go together today.