The Impact of Performance Reviews on Team Morale

He was the quiet backbone of the team. On paper? Just “meets expectations.” In reality? Irreplaceable. Recently, I watched a manager freeze when her top performer handed in his notice. It wasn’t just because he was leaving - he had plenty of options. It was because, on paper, he was rated “meets expectations.” That label hid everything that made him essential: the quiet coaching he gave new hires, the long nights keeping a failing project alive, the trust he’d built with customers no one else could calm. All “meets expectations.” And so, when he left, it caught her, and everyone flat-footed. Here’s the truth: Someone six months into a role? Meets expectations. Someone navigating a messy, high-stakes project? Meets expectations. Someone growing faster than their job description can keep up? Still…meets expectations. The way we measure performance makes a bell curve whether we intend it or not. And once people land in the middle, it’s hard to see what makes them matter. That’s why I’ve come to appreciate a question I first heard from Netflix - a question I wish every manager asked before it was too late: “If this person gave notice tomorrow, how hard would you fight to keep them?” It’s the kind of question that slices through the polite language of performance management. It forces you to name who you rely on, who you trust, who you believe in. It exposes the gap between what’s written in a calibration spreadsheet and what you feel in your gut. It sparks the conversations we should be having all along: Not, “did they tick all the boxes?” But, “do we really know what they’re worth, and are we treating them accordingly?” When you ask this question, you start seeing your team differently. Even more importantly, they might finally feel seen. So before your next performance review cycle, I challenge you: Don’t wait until someone’s walking out the door to figure out how much you value them. Have the conversation now. Do the stay interview now. Give the feedback now. Because people don’t leave companies where they feel recognized, invested in, and believed. They leave when they feel invisible behind a label like “meets expectations.” And frankly, we need to start asking ourselves... is the once-a-year performance review even useful anymore? (But ah, that’s a conversation for another post!) For now, at least consider these three take-aways: Stop treating “meets expectations” as the ultimate truth. It’s just a snapshot, not the full story. Stay interviews are more powerful than exit interviews. Don’t wait until goodbye to find out what matters. Performance management should be a mirror AND a flashlight. A mirror to reflect reality - and a flashlight to show the path ahead. Ask the question. Make it part of how you lead. And build the kind of company where your best people don’t just stay. They grow, they inspire, and they never wonder if they’re seen.

We're going to fire the bottom 10% of our sales team every year! If they're in the bottom they gotta go! NO EXCEPTIONS! It doesn't matter if they're improving. Years ago, as a young director at one of the top medical device companies globally, the above is what we were told at our quarterly leadership offsite but executive leadership. Seemed straight out of a ruthless playbook: fire the bottom 10% of performers every year. I (and many other leaders) were stunned. This approach, glamorized as a method to continually ‘upgrade’ the team by cutting the ‘dead weight,’ was about to disrupt lives and destabilize our teams. Curious, several of us challenged this idea. What was the impact of this strategy? Were we actually nurturing excellence, or were we fostering a culture of fear? I dug deeper: ↳ Spent extra time with team members who were seen as underperformers. ↳ Analyzed performance data beyond the surface to understand context. ↳ Looked into the possible ripple effects on team morale and productivity. ↳ Partnered with one of my incredible HRBPs to gauge the emotional (of the current team) and operational cost of high turnover. ↳ Dug into who may simply be in the wrong role, or who didn't get the right training. Cutting the lowest performers might sound like a straightforward way to boost productivity and drive success. It’s a numbers game that looks good on paper but overlooks the human element that is crucial to a company’s long-term health. Why This Approach Fails: 1️⃣ It Ignites Fear, Not Motivation: When employees are constantly worried about being in the bottom 10%, it creates a culture of fear. Instead of motivating employees to perform better, it often leads to short-term, desperate measures that sacrifice quality and teamwork. 2️⃣ Undermines Team Cohesion: Collaboration and team spirit suffer when everyone is looking over their shoulder. 3️⃣ Lacks Constructive Feedback: This approach dismisses the importance of developing employees. Many who might underperform could thrive with proper guidance and support. 4️⃣ Short-sighted and Misaligned: It assumes that past performance perfectly predicts future potential, ignoring external factors affecting performance and individual growth trajectories. It’s a cookie-cutter solution to a complex issue. 5️⃣ Turnover Costs: High turnover has a significant cost—both in terms of hiring and training new employees and in lost productivity. The constant churn can also damage your company’s reputation over time. That experience taught me a powerful lesson: leadership isn’t about following cutthroat policies. It’s about seeing the potential in your people and investing in their growth. Before you cut anyone, ask yourself: Have I provided the right environment for everyone to succeed? Should you be pointing a FINGER or a THUMB?

🚨 The Performance Review Lie: What Your Employees REALLY Want to Tell You 🚨 After years of observing leadership failures and speaking with professionals across industries, I've noticed a disturbing pattern: people lie in performance reviews. 😔 Not because they're dishonest, but because they've learned that honesty gets punished. ⚠️ 🌟 BELIEVE in authentic feedback! 🌟 👉 "I'm satisfied with my current role" actually means... 💭 "I've given up asking for advancement because you promote based on politics, not performance." 🔥 👉 "No additional training needed" actually means... 🎯 "I've stopped requesting development because you always say 'budget constraints' but somehow find money for executive retreats." 💸 👉 "Communication is fine" actually means... 💬 "I've learned that challenging your ideas gets me labeled as 'not aligned with company vision.'" 🚧 📢 What They're NOT Telling You: 🔥 Your "360 feedback" is a joke Nobody gives honest input because they know it gets back to managers who hold grudges. 😞 🔥 Your performance metrics are broken You measure what's easy to count, not what actually drives results or innovation. 📊 🔥 Your development plans are empty promises "We'll revisit this next quarter" has become code for "never going to happen." 🚪 💰 The Real Cost 💰 Every sanitized performance review represents: 🧠 Missed coaching opportunities 💵 Wasted potential sitting right in front of you 📉 Talented people mentally checking out 💔 Trust erosion that takes years to rebuild ✅ Getting Honest Performance Conversations Smart leaders: ✓ Ask "What barriers are preventing your best work?" instead of "Are you meeting expectations?" 🤔 ✓ Share their own challenges and growth areas first 🪞 ✓ Create psychological safety where disagreement is valued, not punished🛡️ ✓ Focus on future potential, not just past performance 🚀 💡 Here's the hard question: If your employees could give you a performance review without consequences, what would they say about YOUR leadership? 🤯 The people sitting across from you in those reviews aren't the problem. They're protecting themselves from a system that punishes truth-telling. 💯 Start modeling the vulnerability you want to see. Share your own areas for improvement. Ask better questions. Create space for real conversation. 🗣️ Your next performance review cycle is an opportunity to revolutionize your leadership. Will you take it? ⚡ ✨ I help organizations and teams transform trust into a high-performance tool through the BELIEVE Framework program. Reach out to me if you need to Lead Boldly, Build Boldly, Grow Boldly. I am here to help. ✨ #PerformanceReviews #WorkPlaceTruth #OrganizationalCulture