I selected some questions that will help you build a performance appraisal system that works for your business or organization.

Try to answer with the utmost sincerity. Below I put my own.

  1. What is high performance for you or for your organization?
  2. What kind of performance do you want to measure? Organizational, team or individual performance?
  3. What are the reasons that drive you to measure performance?

Here are my answers:

  1. High performance is delivering maximum value to society, causing a positive impact on the world. It’s not hitting goals, meeting schedules, pleasing the boss, following the script, giving false smiles, let alone pretending to exemplify the firm’s values.
  2. I want to measure the performance of the organization or a team (when it is autonomous, able to deliver value without external dependencies). I don’t want to measure an individual’s performance because:
    1. The client hires the organization and not just an isolated worker.
    2. Making use of prizes and sanctions (carrots and clubs) to motivate people is harmful.
    3. The individual evaluation process discourages teamwork.
  3. I want to know how much value and impact my organization or team is producing and better understand how to improve systems, context, structure, culture and processes.

Did you find my answers strange and disagree with them? Know that you are also disagreeing with an old man who has already won an award from the Emperor of Japan for his contributions to the Japanese industry.

Deming said:

The effect (of performance appraisals) is devastating: it promotes short-term performance, annihilates long-term planning, demolishes teamwork, and encourages rivalry and politics. It’s unfair because it attributes to individuals in a group the differences that can be totally caused by the system within which they work.

– Edwards Deming

So we came to the first and most important conclusion about performance appraisal.

Don’t evaluate individual performance.

FAQ about Performance Evaluations

If you got here hoping for help conducting an individual performance assessment you should be frustrated and full of questions. I’ll answer the most common questions below. After all, you may be more convinced, but you doubt if you can change the minds of others in your organization.

1) Should we abandon all the strategies we use to measure each employee’s performance?

At the time of recruitment, it makes sense to assess whether the candidate has the qualities and skills we are seeking. However, since he is within the organization and is motivated, it makes much more sense to put our energies in removing obstacles so that he or she is able to achieve the best possible performance.

The prevailing formula on performance management includes the following steps: a) managers qualitatively specify the work and define goals; b) they supervise and quantitatively evaluate individual performance; and c) they reward and punish accordingly. It is quite old, and was well defended by Frederick Winslow Taylor because it blends perfectly with the idea of ​​separating the mental work from the manual one and a dehumanizing view of the employee.

2) Within this logic, how to help employees in their professional development process?

Focus on strategies that promote processes centered in self-evaluation and an organizational culture that encourages the exchange of feedback among all. It’s not an easy task, mainly because we are used  to working in hierarchical environments that stimulate passivity and disengagement. Working on these points needs to be part of a broader effort that may involve deeper and more cultural organizational changes.

3) How do I give raises and promotions in proportion to each employee’s value delivery?

Few things are more disheartening than a compensation perceived as unfair. The way an organization defines its salaries is treated as taboo in most companies. The reason: there is no system with clear rules that apply to everyone. An interesting way is to reward people for the skills and abilities they bring to the organization, rather than positions and performance. In this type of approach, the “performance” component is disregarded in salary and other self-regulation mechanisms are created to keep low performers from staying in this state for too long.

4) How can we identify those employees who perform far below the required level and who need help to “look for new challenges”?

The overwhelming majority of so-called “low performers” are unmotivated. Everyone knows who the disengaged are within a team. The problem is that people don’t talk because they are afraid of being punished or even fired. To cope with this, it’s crucial to create spaces for people to re-evaluate their own level of engagement on a recurring basis. Then everyone can talk openly about how they are feeling and what is keeping them from expressing their purpose in a particular role within the company.

5) Don’t we need to improve individual performance in order to improve team performance?

There’s no doubt that the characteristics of individuals in a team or organization directly influence the results or performance that group achieves. However, performance is also strongly influenced by emerging properties, such as organizational culture, and by systemic and structural characteristics.

Focusing on the assessment of individual performance generates the side effects cited above by Deming. Working on other elements of the context, such as culture, structure and systems, may be more difficult at first, but it doesn’t generate undesirable effects. In addition, by fostering a culture of professional development centered on self-evaluation processes and the exchange of continuous feedback, we are promoting the improvement of individual performance.


Large organizations have abandoned traditional systems for evaluating individual performance. Some examples: Adobe, REI, Expedia and Juniper Networks. They have all realized the benefits of increased engagement, improved organizational climate and performance. What prevents you from doing the same?