According to this Harvard Business Review article, being ranked at work, either as individuals or as teams, provokes our brains into a “fight or flight” response. This response overrides our prefrontal cortex – our Executive Brain – causing us intense anger or anxiety. As we are not able to physically fight anyone or run away, we suppress those emotions temporarily until we return to our desks. Once there, we ruminate about the incorrect and unfair rating, or create frightening scenarios of our future.
No wonder 95% of managers are dissatisfied with their Performance Management system (Corporate Executive Board 2013). Mercer’s 2016 study found that 85% of organizations report their talent management programs and policies need an overhaul.
I heard recently about a team of people who had reached every goal they had set the previous year, and then some. Out of a rating scale of 1 to 6 (nobody gets a 6), they expected to receive a 5. They were shocked to find their boss’s boss awarded them only a 4. They asked to know what they had or hadn’t done to earn such a rating, but only received a vague explanation from their boss’s boss. They checked around and found that most teams had received a 5 rating and only 2 other teams had received a 4 rating. They felt they had performed better than several of the 5 rated teams. Their boss agreed, but suggested the reason for the 4 rating may have been because they hadn’t set challenging enough goals, so it had been too easy for them to succeed. You can imagine how the team felt about that.
If this process is hated so much, why does it continue? Is it because it is the way we have always done it?
The original research in the 1970s was based on the work of BF Skinner, who showed that pigeons and rats could be trained to press and peck by Operant Conditioning. This was a careful process, whereby the animal was rewarded (with food or water) by any approach toward the desired behaviour, and punished for less desirable behaviour by the reward being withheld.
BF Skinner became famous for his work and his techniques have been used with great success by animal trainers ever since. Unfortunately, he suggested his famous process could be used with people in the workplace: reward the desired behaviour and subtly punish the unwanted behaviour. Management consultants embraced these ideas with fervour and the Performance Management process was developed.
Just like economists, management consultants believed that most humans are rational beings who will do more of what is rewarded and less of what is punished. Research into human behaviour, both in economics and in the workplace, shows this belief is only true for very simple behaviours, like capping a certain number of widgets per hour. And even then, several workers together will quickly work out the easiest way to “game” the system.
Human beings are amazingly productive when they are allowed to problem-solve together to get the job done quickly and accurately, while having every opportunity for autonomy, mastery, and purpose. But they (and their brains) do not respond well to being “motivated” by punishments and rewards.
This excellent 3 minute presentation, How Your Brain Responds to Performance Rankings, will explain this clearly.
The good news is that the NeuroLeadership Institute, led by Dr. David Rock, has been studying and publishing about this Performance Management issue. As a result, since 2010, over 50 large companies, including Microsoft, GAP, Adobe, NASA, Sears, New York Life, FedEx and Sony, have radically altered their Performance Management processes.
First, they drop their rating system. Then they train their managers on how to minimize threat by having regular and honest conversations, one-to-one with each employee, preferably monthly, but at least quarterly. And they foster a Growth Mindset in the whole organization, as well as in each individual. See A Fixed vs. Growth Mindset.