Microsoft gets over 100,000 suggestions each year from their users for changes to their Office suite. Approximately 75% of these requests are for features that are already in their products - a revelation that led to the latest version, Office 2007, implementing significant changes to the user interface.

Five hundred million people use Office world-wide, yet estimates from various sources scope the size of the development team at between 500 and 1000 people. Thus, with as many as a million licenses in the marketplace for each member of the team, the revenue per developer which Microsoft receives for this product is substantial, and their collective efforts are clearly one of the highest value-producing ventures in business today.

Let's assume there are about 600 developers. Were the 450 people which produced these less frequently used features in prior Office versions productive or not, when compared with those that produced the functionality that everyone knew about and used routinely? Do the feature teams who worked on the most frequently used features deserve to be rewarded more than the teams who worked on features that weren't used as much, since the commonly used features clearly played a greater role in Office achieving marketplace domination? Is there a way to measure (and therefore reward) which individuals were the greatest contributors to market success, and which ones were just looters and moochers? Should the people that generated the most output reap the greatest rewards? And which rewards are the greatest, anyway - riches, fame, respect, or just the satisfaction of a job well done? Finally, of these motivations, which might energize employees to achieve the best outcomes for all stakeholders in the future?

Each year, managers and employees across the country try to understand answers to questions such as these as they participate in performance evaluations, and follow-on performance planning activities for the subsequent year. The objectives of these processes are to recognize outstanding accomplishments, provide feedback to team members on their strengths and weaknesses, motivate and reinforce desirable behaviors, and provide coaching on potential, personalized improvement strategies, so that people have the opportunity to enhance their value for current and future assignments.

These objectives seem reasonable, but from my own observations, they are not easily or frequently realized. The attitudes which people have about this, and the challenges in achieving such goals, are substantial; consider these anecdotes:

It's not surprising, then, that the prevailing attitudes that many people have when heading into these performance management cycles are cynicism and a belief that the process wastes their time. So called 'pay for performance' approaches rarely work for motivating performance. Even when considering performance management in a broader context, it's not clear that appraisals (as typically practiced in business) pass a straight-faced cost-benefit analysis, especially when reasonable measures of effectiveness - customer satisfaction and measurable improvements to overall performance - are honestly considered. From one perspective - the effects of performance appraisals on resulting changes to a person's compensation - these evaluations still play a key role (though not always a clear one), and so are generally considered necessary. But are they sufficient to fuel the changes that busineses require to stay competitive? And are they recognized for how important they are to the individual's own growth?

To reflect on this situation, let's begin by looking at this year's expected returns for top performers, average performers, and underperfomers. This data indicates that the spread between the top and bottom performers, at least on average, can be disappointingly small, given their relative contributions. If you think for a while about this, you'll realize that the average raises of those who are not top performers will be - well - less than average. This fact leads to the very real risk that these reviews (and their most tangible output, a person's change in salary) more frequently produce discouragement rather than motivation. This is especially true since many people tend to have an inflated view of their capabilities. When this risk is combined with a process that most people don't completely understand, and some may not trust, we should not be surprised when the results themselves often do not meet expectations.

This series of articles strives to help demystify this process, by providing one person's view of performance management processes - what works, what doesn't, and what can be done to improve both the process, the participants, and the outcomes. Having sat through performance evaluations for over 25 years (on both sides of the desk, and in many different organizational settings) I've had a chance to observe many approachs, watch common patterns that emerge, and reflect on their dynamics over time. I'll try to put the appraisal process in the context of it's value to all stakeholders, be brutally honest about why things are so difficult, and sketch a direction for both managers and employees to take in order to influence their collective future outcomes positively. In short, I seek to use performance management on performance management, as designed and as practiced.

In picking a format for this material, I've tried to deliver my thoughts in a way that will help the ideas to stick. I make frequent use of analogies to drive points home, and suggest plenty of ways that insights could be made applicable to your own situation. I also provide this material as individual articles that can be digested in 'bite-sized' pieces, and referred back to later (via hyperlinks) over time, during the recurring, annual process which we all participate in. This structure should also help to focus comments and questions which I receive on particular areas of interest, and enable insights to continue to be captured, and questions answered, over time, using the comment features of this site. Throughout these writings, there are also a significant number of hyperlinks to other material provided, for those that want to dive deep and explore the background behind my assertions and mental model. But if you're in a hurry, you can skip over those links, and just scan for the major concepts in the basic material.

The below articles thus are intended to stand alone 'individually', but also build upon information from each successively, to lead readers towards a set of conclusions and actions. Many of the articles have additional, lower-level articles nested under each of the below headings; if you read any of the below topic headings, and find that the topic planned is not of interest to you, you can skip over these more detailed writings, since the nested articles are all relative to the below topic areas. If possible, though, I encourage you to read through the material (as you have time) in the order presented.

By exposing my own 'mental model' to my team, I hope to stimulate self-examination, promote discussion about how to improve and tailor the explanations and approaches that I've offered, and converge on a shared understanding of how to make these processes work for all of us. Let's dive right in: