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Radhika Panjwani is a former journalist from Toronto and a blogger.

In a recent LinkedIn post that went viral, Daniel Rutberg, co-founder of Los Angeles creative agency MuteSix, wrote about being passed over for a promotion early in his career because of a disconnect between his performance review and his performance. Clearly, Mr. Rutberg’s post resonated with many.

“I had no idea how to get promoted. So, I left,” he wrote.

When Mr. Rutberg resigned, the company belatedly offered him a promotion. He declined.

When he finally went on to start his agency with his co-founder Steve Weiss, the firm created a freely accessible document that spelled out among other things, the exact milestones employees would need to hit before they could move up, the timeline to acquire certain skill sets and the compensation package for each level of promotion.

“Employees deserve to know the path forward,” Mr. Rutberg noted, adding that the company enjoys a high employee retention as a result.

At the heart of this scenario is a flawed traditional performance management system built around major contradictions. There’s lack of clarity and transparency, not to mention an inherent feeling of defensiveness and resentment from the employees. Perhaps, the most critical shortcoming is that the process places an excessive focus on incentives, that is, raises and promotion.

In Re-Engineering Performance Management, a survey for Gallup in 2019, lead researcher Ben Wigert and chief scientist Jim Harter found 71 per cent of employees thought the annual review process “unfair” and 74 per cent said it was “inaccurate.”

“When employees see their work minimized to a single number that describes their performance, whether it is a rating or a ranking, their focus shifts from how to improve their performance to whether their manager is qualified to judge their performance,” the authors noted.

They also found that managers typically critiqued their direct reports based on subjective judgments and common biases. A prime example of this would be the “water cooler effect.” This happens when a manager overhears one of his reports saying something inappropriate to a colleague. It’s likely that from that moment onward, the manager will subconsciously remember the incident and recall it during evaluation time.

The sole purpose of the traditional evaluation system appeared to be standardization as opposed to individualization with many employers obsessively focusing on pre-determined matrixes. Also, managers used the reviews for a whole laundry list of things such as offering advice (on how to improve), setting raises, bonus or promotion; and in some cases, laying groundwork for future dismissal.

“In other words, if performance reviews were a drug, they would not meet FDA approval for efficacy,” the authors said.

The fact that appraisals are an annual ritual in and of itself is a problem, according to Susan Heathfield, a human resources and management consultant. Employees need regular feedback and goal-setting, especially when they’re working in nimble environments, she writes in The Balance Careers.

Then there’s the issue with how managers conduct the appraisal sessions. Most use the allocated time to “lecture” subordinates about their shortcomings, Ms. Heathfield says.

There’s also now evidence to show the already fraught performance review will assume an even more ominous overtone because of remote working.

As detailed in an article for the Harvard Business Review, researchers from the Henley Business School at the University of Reading in England surveyed 757 employees worldwide about what factors influenced promotions.

A little more than a third of respondents were in management positions. The management participants were asked for the qualities and attributes they would consider when promoting someone while being cognizant their employees spent the year working from home. The result was a blend of new and predictable outcomes.

The authors said a decline in professional relationships at work affected the promotions. A year of remote working likely jeopardized some employees’ chance of an upgrade. Managers cited the absence of face-to-face catch-up as one of the reasons.

In some instances, leaders found it increasingly difficult to evaluate individual performances when outcomes were tied to a team or collaborative work. The pandemic was also cited as a reason why companies put a “freeze” on wages and promotions.

There’s a cost to replacing fleeing employees, writes Christina Merhar in a PeopleKeep blog. And yet, most companies are surprisingly nonchalant and complacent with status quo. Make no mistake, when employees are not heard, they will leave.

What I am reading around the web

  • The recent case of ransomware at Colonial Pipeline in the U.S. has resulted in companies being on the edge. Kevin Mandia, CEO of cybersecurity firm FireEye, tells Forbes how companies can “limit the blast radius” of cyber attacks.
  • If your computer showed symptoms of having caught a bug last week, it was likely caused by Fastly, a cloud computing platform. As reported in Fast Company, the bug caused one customer to “topple the tent poles” of the internet, causing major websites to shut down.
  • In this article in Canadian Business, Marc Ouayoun, president and CEO of Porsche Canada, talks about the future of automobile industry, the disruptors, mentorship and leadership. “The connected car, for example, could communicate with a stoplight to reduce congestion. We’re working on apps that would tell you where to park in a city ….”
  • Good managers are good coaches. As discussed in The Chairman’s Blog in, the practice of management is broken. Managers polled reported experiencing higher stress and burnout than the employees they manage. The key is to be a head coach.

More opinion from Globe Careers

If personality tests are ableist, racist, sexist and classist, why would you use them in the workplace? Here are the best practices when assessing personality, a process that should be implemented in the workplace for selection and development, writes Navio Kwok for Leadership Lab

Find a ‘safe brave space’ that will help you flourish post-pandemic Even for those whose jobs have not been directly affected, the burden of the pandemic has weighed heavily, says columnist Naomi Titleman Colla

More from the section

Why change doesn’t need to take place only on New Year’s One of the keys to success is changing bad habits that undercut your performance. But once you target those bad habits, how do you succeed in changing them?

I’m pregnant and hesitant to go to work. What are my options? A reader asks about taking some unpaid time off from work until the pandemic gets better in the weekly Nine to Five advice column.

Expect hybrid work arrangements in the return to the office after COVID-19 If vaccines and variants have been the buzzwords for the first part of this year, the second half will likely be dominated by the word hybrid.

Leadership Lab is a series where executives, experts and writers share their views and advice about the world of work. You can find all Leadership Lab stories at and guidelines for how to contribute to the column here.

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