If you think about what are the best performance management programs that have been put in place, they're usually systems that can really differentiate top talent from not quite top talent.
Too many times, what I've seen, companies will spend hundreds of thousands of dollars putting in these great software systems but they still fall victim to the number one problem plaguing performance reviews in companies across America: grade inflation.
We know that the path of least resistance is avoidance, and people generally avoid confrontation whenever possible. This all too human trend often finds its way into the annual performance appraisal process, where supervisors inflate grades to appease subordinates in an effort not to “demotivate” them.
Unfortunately this practice creates documentation that subordinates’ performance met company expectations for the period, which makes it much harder to terminate or lay off people who in reality may be creating more problems and challenges than they’re solving (especially relative to their peers).