A certain type of employee seems to appear in every company. These are the people who never seem to meet deadlines, who always have to be pushed to get their work done, who make the same mistakes over and over again, who don’t seem to do much on their own, and who never seem to try very hard.
At some point, it seems, every manager has decided, “Well, this employee just isn’t performing,” and sometimes, they may well be right. This begs the question, though: How much of this poor performance was actually caused by the manager?
This has the potential to be a wildly uncomfortable question, since managers are, by definition, responsible for judging performance. They set standards, determine who is doing the best and worst jobs, decide who gets promoted and who gets fired. They evaluate and judge. They decide what’s acceptable and what isn’t.
Yet here’s the thing: management comes before performance.
Managers decide what’s important, what gets done and what doesn’t, what gets approved and what gets dismissed, what gets rewarded and what gets punished. Managers decide how much autonomy employees have, how much freedom they have, how much leeway is allowed, how quickly problems are solved, and how much employees understand what they’re supposed to be doing.
In short, managers don’t just evaluate performance; they have tremendous influence over it. They may be standing in the control room, but they’re also often the ones pushing all the buttons.
The Employee & Manager Slices of the Problem Pie
A 2024 NBER study sought to identify the causal effect of managers on their teams’ performance.
The paper’s authors experimented with repeated reallocations of managers, controlling for differences in the skill sets of the teams. The purpose of the experiment was to quantify the effect of a simple managerial change, and the results were astounding.
The study found that good managers improved their teams’ performance by approximately double the number of “good workers” would have. The paper uses the phrase “good manager” to denote someone who consistently drove better-than-expected results from their team.
N.B.: The cited results do not mean managers are twice as productive as employees. Far from it – both the phrasing and the findings suggest the opposite.
The findings suggest that if you hire a good manager, you cannot simply lay off half your staff in favour of the manager and expect double the performance. Neither do they suggest that employees are fungible or that an outstanding manager would be able to extract twice the performance from any arbitrary set of subordinates.
What the study does suggest is that the people managing your team can affect your team’s performance by a surprisingly wide margin. It suggests that both your employees and your managers matter, and that the combination of the two matters even more.
Another NBER study of transfers between stores in two large retail chains found that, given the consistency of management practices across the businesses, studying how individual managers affected the performance of their new teams gave a less distorted view of the contribution to productivity that a manager can reasonably be expected to provide.
Both these studies suggest not that employees are unimportant, but that “the team is underperforming” is a dangerously incomplete diagnosis. Your team may be underperforming because your employees lack the experience, skill, or commitment to do the job well. It may be that your employees are entirely appropriate for the task, but they are, in fact, being managed poorly – either at the level of individual contributors or individual executives. It may also be that your employees are being managed by an ineffective manager, an ineffective system, or a combination of the two.
Consider the following scenario:
Your manager changed your team’s priorities on Monday.
You spent all of Tuesday prioritizing the newly prioritized project.
On Wednesday, an emergency cropped up, and you had to change priorities again.
On Thursday, your manager asked you why the first project wasn’t getting done.
On Friday, you found out the delivery date for the first project had slipped because of something that happened in another department.
When you go into your performance review, your manager tells you that you need to be more organized, take more ownership, and all the usuals. Maybe you do need to be more organized, but have you considered that it may not be your responsibility to rearrange your entire workload when priorities change?
This is why management should not be considered an optional part of the performance system – because it is an integral part of the performance system. It has to be. Research on role ambiguity shows that when there is insufficient clarity about what’s expected of you, your performance tends to suffer.
This does not mean that every underperforming employee is necessarily being managed badly. However, it does mean that we can no longer think of clarity of expectations as an employee competency. That kind of clarity is frequently the responsibility of managers, which, again, puts it squarely in the realm of managerial responsibility. Using this framework to understand performance issues can help you recognize some “bad” behaviours as the result of years of poor management.
An employee who is afraid to make decisions may have learned that decisions are rarely wrong.
An employee who asks permission constantly may have learned that acting without permission makes them look foolish.
An employee who is disengaged and cynical may have learned that no matter how hard they try, nothing changes.
An employee who misses priorities may have been given too many changing priorities.
An employee who always works right up to a deadline may have learned that nothing gets done before one.
An employee who can’t do anything without their manager may, in fact, have been taught that by their manager.
This brings us to one of the most damaging management practices: managerial interference.
When managers interfere with the day-to-day responsibilities of their direct reports, they train those direct reports to deal with everything at a level two steps below their actual level of responsibility. It doesn’t matter whether they are “helping,” “teaching,” “managing,” or “holdingaccountable.” Interference creates inconsistency, confusion, and the impression that the manager can’t handle anything without stepping in. Employees managed this way may always present problems at the executive level.
They may be unable to own problems or solutions.
They may always need their manager’s help or approval.
They may fear making mistakes without knowing their manager’s input.
They may have become unreasonably rigid in their approach to their responsibilities.
Micromanagement Can Manufacture the Dependence It Complains About
Micromanagement is typically defined as a practice that is detrimental to employees because it limits their freedom of action. This is partially true, but it is also a consequence of a much larger effect. Micromanagement can actually cause behavioural changes in people.
🔄 For example, suppose that you have hired a competent person to do a competent job. They make a decision you wouldn’t have made. You tell them they’re wrong. The next time they’re faced with a similar decision, they ask you what to do. You tell them, they do it, and you correct them again. The next time they’re faced with a similar decision, they ask you what to do. You tell them, they do it, and you correct them again. The next time they’re faced with a similar decision, they ask you what to do. You tell them, they do it, and you correct them again. 🔄
See where this loop is going? Eventually, they stop making decisions and simply ask you for instructions. You give them more detailed instructions. They ask you for more detailed instructions. You decide that they simply don’t have the initiative to do their job, and you start watching them more carefully.
🎉 Congratulations! You’ve just created the employee you were originally complaining about! 🎉
For those scoffing at this example, this is not just theory. A meta-study of 72 studies, 83 samples, and more than 32000 people found that employees who perceived their leaders as acting in an autonomy-supportive manner had more positive work outcomes. This includes positive associations with work performance, engagement and proactive work behaviours, and negative associations with turnover intentions.
Autonomy-supportive leadership is not being completely uninvolved. It provides freedom in action and decision-making, takes their input into account, and encourages self-initiative without hindering them, which is an extremely important difference.
Good management is not telling people to do whatever they want, or to do exactly what you would do; rather, it is telling them what you want them to accomplish and letting them do it, while intervening when they cannot accomplish their goals without assistance and helping them when they can. This results in much more competent employees, who are much less reliant on their managers.
This is especially important because a manager’s job is not to process every single decision that their employees make. If you have to answer every question they have, you’re not managing effectively, and you’ll likely end up with a queue of people waiting to hear from you, rather than competent employees who can handle most things on their own.
The irony is that managers often fall into this trap precisely because they want to be effective. They feel like they are doing their job by answering every question, but they are actually defeating their purpose.
Managers are accountable for their team’s performance, so it can be tempting to take responsibility for everything they do, but it is far more effective to let them handle things on their own and intervene only when absolutely necessary.
This is the difference between a manager who is simply a bottleneck for decision-making, and a manager who actually manages.
This is also where the myth of the manager as a performance evaluator falls apart: a manager does not simply determine whether someone can perform; they determine how much opportunity they have to perform.
That is not to say that a manager is not accountable for performance; it means that they have much less opportunity to affect performance, and much more opportunity to create poor performance by failing to provide the resources, freedom, and feedback necessary to actually perform.
If someone is consistently underperforming, even when given the resources, freedom, opportunities, and feedback they need, then they are likely to be a poor performer, but if they are not, then they may not be the problem, and it may be the system that is failing them.
Right now, ten thousand manager voices cried out in agony, objecting virulently because they are often expected to be the ones who determine whether or not someone can perform, and therefore they feel like they need to control everything in order to make that determination.
The Meaning of Management
A manager should not try to determine whether someone can perform; they should create an environment in which they can perform, then evaluate whether they are performing, rather than trying to determine whether they can perform.
This is also the point where many managers will start to see the flaws in their own management practices. The manager who is constantly changing priorities, rewarding the wrong people, avoiding difficult conversations, and putting out fires is not doing so out of malice or incompetence, but rather out of a desire to manage effectively.
They are trying to create an environment in which their employees can perform, but they are failing to do so; as a result, they constantly have to intervene to prevent employees from failing. Such a method is not an effective way to manage, and it is a sign that the manager is not administering matters effectively.
It is important to remember that management is a process, and that there are many different ways to achieve its goals. Some managers are better at it than others, and some managers are simply better at certain aspects of it than others.
However, there are some fundamental principles that all managers should follow, and one of them is providing their employees with the freedom of action and decision-making, taking their input into account, and encouraging self-initiative, while not hindering them.
The Behaviours You Reward Become the Behaviours You Get
One of the easiest ways for a manager to destroy performance is to reward the wrong thing, and this is rarely because they are evil. They are usually just rewarding the most obvious things.
Someone stayed up late to finish a project – that’s dedication. 10 points for Gryffindor!
Someone dropped everything at 7 pm to help out with an urgent customer problem – that’s heroism. 20 points for Gryffindor!
Someone responds to my Slack messages within 30 seconds – they are committed. 30 points for Gryffindor!
Someone worked over the weekend to meet a deadline – let’s give them a round of applause. 40 points for Gryffindor!
Meanwhile, someone quietly fixed the processes that would have stopped the weekend crisis from happening in the first place, but they have gone unnoticed. No points for Ravenclaw!
Alas, that is how companies end up rewarding people for making fires rather than putting them out.
One of the most interesting things about organizational performance is that the market value of various workplace behaviours often bears little relation to what the company says it values.
A company can say that it values planning, quality and sustainable performance, but if the people being promoted are the ones who work the longest hours and save the day at the last minute, the rest of the company will quickly learn that last-minute heroics are the most important thing. They are not dim in any way whatsoever; they simply observe their colleagues’ behaviours and learn from them.
A manager’s actions are effectively a set of behavioural coaching cues for the whole team.
If you reward people for being available to your team at all times, you can expect availability to become a key performance indicator.
If you reward speed of response regardless of errors, you’ll get speed of response.
If you reward people for taking all decisions up the chain of command, you’ll get a company that cannot make decisions.
If you reward people for preventing problems, you’ll get people who prevent problems.
If you reward people for being “a bit of a pain but getting things done”, you’ll get people who get things done but are “a bit of a pain”.
That is why recognition is such a powerful tool. Beyond making people feel good, it sends market-value signals to the team about what is and isn’t important.
Studies on management practices have found that goals, monitoring and feedback can have a major impact on productivity. In field experiments on airline captains, management practices such as performance monitoring, feedback, target-setting and prosocial incentives all led to significant improvements in targeted fuel-saving behaviours and, in some cases, increases in overall job satisfaction.
Now, this does not mean that managers should monitor everything. That would simply proliferate the very thing we want to see less of. What it does mean is that monitoring is part of the feedback loop. What you measure, discuss, and reward affects performance. So does what you allow to continue without correction, and most importantly, what you repeatedly rescue.
If a manager has a team that misses every deadline and responds to every problem by throwing the manager into the fray to “sort it out”, they should ask themselves what they have taught the team. They may believe they have taught the team to do better, but the team has actually learned that the manager will always rescue them when things go wrong. They learn to avoid responsibility and expect the manager to take over when things get tough. Meanwhile, the manager learns that the best way to deal with recurring problems is to rescue people rather than fix systems.
They have all been conditioned to act that way, without anyone intending to, and that is one of the fundamental problems with management.
Managers are powerful role models, and everything they do sends behavioural signals to the team. When it comes to busyness, managers don’t have to tell people to work long hours; they model it.
If they work 12-hour days, people will notice.
They will also notice if someone leaves at 5 pm every day and quietly works from home in the evenings.
They will notice if someone is praised for working 80-hour weeks and taking no breaks.
They will notice if working from home is seen as a perk and taking holidays is presented as selfish.
They will all learn different lessons about busyness and productivity, adjusting their actions and becoming incredibly busy without actually doing much useful work.
The difference between busyness and productivity is often invisible to the people involved.
Preventing problems before they occur rarely seems as important as putting out fires.
Processes and procedures are often seen as less exciting than dramatic actions.
Careful decision-making seems less impressive than “thinking on your feet”.
A team that learns to solve its own problems without constantly escalating them to the manager will make the manager feel less important.
It can make the manager feel redundant, which is why effective managers often feel their contributions are less valued by executives than they should be. They are busy people, making important decisions, solving problems, and rescuing the company from disasters, but those actions do not have the same impact on the bottom line as preventing those disasters from happening in the first place.
That is the real value of a good manager: they make the company less reliant on them, which makes the company more successful. It also makes the manager less valued by the people at the top.
Avoiding Problems Doesn’t Keep the Peace – It Changes the Team
There is a certain kind of management mistake that feels reasonable in the moment:
There is a certain employee who doesn’t perform.
You think to yourself, “Well, I’ll give them a little time. Maybe they are just having a rough week. I’ll bring it up at their next review. It’s probably not worth creating a scene over.“
A year later, everyone except the person in charge understands that the employee isn’t performing, but no one has addressed it because, really…who has the time?
This mistake is often called avoidance, but it can also be seen as a type of management decision. You’re deciding that this behavior is acceptable, and the rest of your team sees it. You should care because if they are not performing, it impacts the performance of others. It affects your own performance and your team’s culture.
A team’s culture is not defined by the individuals that make it up, but by the standards they share. People look around and think about what it means to be a good member of their team. What does it mean to miss a deadline, to be rude to a coworker, to be chronically underperforming, to do consistently incredible work?
Answers to these questions aren’t written anywhere, but they can be found in managers’ actions. If you tolerate one employee who routinely misses deadlines, conscientious employees will start to ask themselves why they are putting in extra effort. They might not think, “Oh, I’m so glad that [slacker] has more flexibility with their schedule,” but they might think, “Maybe I’m working too hard.” This is an example of a single performance issue affecting others’ performance.
Such instances are why it’s not that difficult actually to have a good conversation and why such conversations should be actively encouraged. A good manager does not have to enjoy difficult conversations, but they should be willing to have them. You don’t have to shame employees or turn every minor performance issue into a morality play, but you should be willing to address issues clearly and directly. You should hold people to standards, because they hold you to standards.
The research on manager-employee relationships also points to the importance of strong working relationships. In particular, a huge meta-analysis on Leader-Member Exchange Theory highlights the value of positive, supportive relationships between managers and employees. Trust, empowerment, and motivation all lead to positive behaviours like increased performance and citizenship behaviours.
This isn’t suggesting that managers should be best friends with their reports, but it does highlight the importance of working relationships. You can’t have trust without mutual respect and the feeling that each party is acting in good faith. That applies to both sides of the relationship. Employees have to trust that their manager will support them, but managers also have to trust that their employee will deliver. Neither side gets to demand loyalty or goodwill from the other. They have to earn it by showing up reliably and doing the right thing.
That’s why inconsistent standards from one employee to the next are so corrosive.
If you promise flexibility to one person because you like them, but deny the same flexibility to another employee who asked, you create distrust on your team.
If you hold one person to consistently lower standards than everyone else, you’re creating similar distrust.
If you tell people that the priorities are one thing, but you change them when it’s convenient for whoever is asking, you’re creating a toxic workplace.
It’s easy to dismiss these issues as unfair, but they shouldn’t be dismissed as unimportant. They effectively erode the trust between manager and employee, and once that trust is gone, you can lose your ability to manage effectively.
Management has a responsibility to set standards. If you’re not enforcing standards, it becomes much harder to enforce standards later. It’s one reason why management is so much harder than employees think.
You aren’t walking into a clean slate each morning. You are always working with an existing culture that you help shape, and that helps shape you.
You can make it easier or harder depending on the decisions you make.
You can make problems more visible or more hidden.
You can make employees self-thinking or dependent on you.
You can make excellent performance commonplace, or you can make extraordinary acts the norm.
Then, after all is done, when you get caught in the middle of it all, you can think, “Why is my team underperforming?“
Who knows, maybe you’re right, but maybe you’re not. They might be underperforming, but it might stem from a source or reason where they are giving you honest feedback on your management system.
So, if you’re thinking about firing them, consider whether firing them would actually solve the problem.
Final Thoughts
Sometimes the issue really is the person. Some people are just slovenly, consistently underperforming, and then failing to meet expectations despite your help, guidance, opportunity, and clear communication.
Managers aren’t superheroes, and your employees are adults. However, managers bear responsibility for the conditions in which their people work.
Before moving on to judgment, consider asking yourself a few tough questions:
Were expectations clear?
Did your reports have the information, authority, and resources they needed to fulfill the requirements of the position?
Did you address issues before they became problems?
Did you allow failures to dominate conversations, or withhold feedback and opportunities for advancement?
Did you fail to delegate, and take over tasks that were rightfully the responsibility of your people?
Would this person be a different performer under a different manager?
This is not an indictment, but an assessment, since research on managerial impact shows a clear conclusion: managers are often powerful predictors of the performance of the people they lead.
So when we find ourselves thinking about firing one of our reports, it’s worth remembering that we may not have maximized the conditions for their success to begin with.
This is not to suggest that we can turn poor performers into strong ones by simply changing their managers or through sheer willpower. Nor is anyone arguing that the solution to every personnel problem is to replace the manager. What matters for memory is that people are often products of their circumstances.
This reframes the conversation from “how do I get more out of these people?” to “what is getting in the way of their success?“
Maybe the issue is unclear priorities.
Perchance the real root problem is an unhealthy dependency on approvals.
Perhaps your people have been rewarded for putting out fires, and are consequently avoiding the larger issues.
Mayhaps conversations are consistently put off until after months of mounting tension.
Possibly you’re not delegating enough and are always solving problems for people who need to learn how to handle them on their own.
These are the sorts of things good management can address: removing roadblocks and creating conditions for success.
The most effective managers aren’t the ones who provide the most resources or information, but the ones who create an environment where their people feel empowered and supported. They promote autonomy, mastery, a sense of purpose, and belonging.
To the untrained eye, the result may often look like the manager isn’t doing much of anything at all. When done well, management is a gruelingly difficult job that is completely invisible, because their role is to ensure everyone else’s role runs smoothly. When done correctly, management creates the conditions for performance rather than extracting performance through brute force of will.
Often the most important questions aren’t about who is to blame for poor performance, but about who is most responsible for improvement. That doesn’t always make it the manager’s fault, but it does mean there’s always a right answer.
For decades, companies have been trying to find a way to get employees to be more motivated.
Some have tried to raise salaries, others have tried bonuses, employee-of-the-month plaques, team-building exercises, pizza Fridays, wellness programs, flexible schedules, or free coffee in the office (and the coffee is the cheapest one imaginable).
Every few years, a new management theory comes along, promising to revolutionize the workplace and unlock the secrets to engaged employees. Despite all this, it seems disengagement is still the norm and burnout is rampant. People are leaving well-paying jobs for seemingly little reason, while at the same time, refusing to budge from lower-paying ones.
What gives? What does it all mean?
The popular answer is simple: money is the most important motivator.
On paper, it makes intuitive sense. People need money to survive, and more money usually means more luxuries. Seems logical, seems good. The problem is it’s only half true!
Money is an important motivator, surely, but it’s a motivator for getting a job, not for doing a good job. This is an outstanding distinction, because most companies don’t have trouble finding people willing to do the work. Getting people through the door is the easy part.
Finding people willing to go above and beyond, solve problems, hone their skills, help out their coworkers, and really care about the job – now there…THERE’s your real challenge. Those things can’t be bought, and no, the old adage of “everyone has their price” doesn’t actually work.
You’ll soon find out that as you increase the salary to keep up the good work & dedication, it goes up and up and up, becoming unsustainable. Then, sensing a shiver down your spine and a feeling of dread, you will quickly realize it was never about the money…but now you’re in the red.
Money Isn’t the Villain, and It Never Was
Before diving into the subject matter, it is important to dispel a common misconception that often surrounds discussions of motivation. In many cases, articles on the topic present the premise as a choice between paying employees well and providing them with motivation at work.
In some cases, they go so far as to list “ways to motivate employees without spending money.” This is not an accurate perspective, however, as fair compensation is a necessity, and not a variable that should be bargained with.
If someone has to pay rent, cover utilities, feed their children, and buy groceries, motivation is most definitely not a priority.
If people are aware that they are significantly underpaid in comparison to their peers, motivation is not a priority.
If salaries barely see an increase from year to year, while workloads and expectations remain steady, motivation is not a priority.
In all of these cases, money is the determining factor in an employee’s attitude and performance. It is an obvious point, but one that is often overlooked by management in favour of other, less effective, motivators.
Money may not solve every problem, but it certainly helps in many cases. Few other motivators hold as much power when it comes to financial concerns. Therefore, it is plain to understand that fair pay is the foundation upon which motivation is built, rather than the other way around.
Or, to put it in less academic terms: you cannot simply replace a raise with a pizza party.
The Difference Between Showing Up and Caring
One reason this myth was born is that compensation really does change behaviours.
Pay someone more, and they will be more inclined to join your company. Offer someone a substantial bonus, and they will be motivated to perform better so that they can receive it. This is known as extrinsic motivation, and it works. Extrinsic motivation is real, and it is important. Without it, few individuals would willingly commit to forty hours of unpaid work each week.
However, once a person’s most basic needs are met, additional increases in compensation motivate them less and less. That’s where intrinsic motivation comes into play.
Think about it:
Why is it that some people always seem to seek out better ways of doing their jobs while others are quite happy to do the tasks that are simply required of them?
Why do some teams manage to stay enthusiastic about their work while others burn out at the same salary?
Why do some talented individuals choose to stay in their current position at a lower wage rather than move to a new company?
Why do some employees remain deeply committed to an organization despite receiving offers with higher salaries elsewhere?
Why do people willingly go above and beyond for one manager, yet do only the bare minimum for another?
This is the motivation that comes from within. Once people stop thinking about how money affects them, they start to think about how their work affects them.
People will rarely change their behaviours for a different paycheck if they feel that there is no impact beyond whether or not they can afford the food on the table and a roof over their head.
If they do not feel that their work has meaning, that they are contributing to something bigger than themselves, that they matter, then they are unlikely to put in extra effort.
Motivation Is Not a Transaction
Perhaps the easiest mistake to make when it comes to motivating employees is thinking it can be bought. It can’t.
Companies often act as if motivation is something they can hand out like another type of compensation: raises, bonuses, employee recognition, wellness programs, benefits packages.
Now, to be clear, all of these are important, but none of them are motivation. Motivation comes from somewhere else. It comes from the relationship between what employees put in and what they feel they get out: trust, opportunity, recognition, respect, growth, autonomy, fairness, meaning.
It all adds up when you think about it. When employees feel as if they are no longer getting what they believe they deserve in return for their efforts, it doesn’t just affect their opinions of the company. It has a direct impact on their willingness to put in that effort in the first place.
It happens gradually, almost imperceptibly at first.
People stop trying to contribute.
They stop experimenting.
They stop advocating for their ideas.
They stop caring.
None of these things occur because they’ve decided the work itself isn’t worth it, but because they no longer feel it is.
That, in the end, is the real reason for any drop in performance: not a change in the work itself, nor a shift in the challenges they face, but a feeling that the effort it takes for the rewards isn’t worth it.
A far easier way to think of it is that people rarely stop working because they’re doing something hard. They stop working because they’ve decided the rewards for getting it done aren’t worth it.
What Actually Keeps People Motivated?
If fair payment is the basis, what else is missing?
This is a question many psychologists and economists have asked for decades. Their main focus has been on finding the correlation between motivation and pay. The different perspectives have led to different conclusions. However, almost every theory boils down to one main idea, which, funnily enough, is also true for almost every aspect of human life:
People will only stay motivated if their work continues to satisfy certain criteria.
One of the theories, which has some strong points, is the Self-Determination Theory, or SDT for short. It focuses a lot on the quality of motivation.
Edward Deci and Richard Ryan, the psychologists who came up with it, believe that researchers should not think about motivation being high or low. Instead, the emphasis should be on the type of motivation a person is showing.
Intrinsic and Extrinsic Motivation Aren’t Opposites
Most people have heard of the concepts of intrinsic and extrinsic motivation.
To keep matters brief, the former refers to one’s inner drive to engage in an activity, whereas the latter is one’s desire to engage in an activity to gain some reward from outside.
While the ideas behind this division are not wrong, they are often misinterpreted since those who promote this view suggest that intrinsic motivation is good and that one should only strive for it. In contrast, extrinsic motivation is presented as bad, and one should even go so far as to actively shun it.
In reality, the truth, like people, is more nuanced and multifaceted. Few people are driven purely by one factor alone, and their motivational factors are usually intertwined and cannot be easily decoupled.
If one wants to become a competent software developer, one has to study and learn the subject matter regardless of any rewards that society offers. However, most developers choose this career solely because of rewards and benefits, such as high pay, opportunities to work remotely, and job stability.
Similarly, few nurses engage in their work purely for personal satisfaction, and most are motivated by the desire to help others, coupled with the ability to earn a comfortable income.
While some salespeople might love what they do and find fulfillment in building relationships with clients, most aim for career growth and the additional income that comes with it.
Likewise, many teachers enter the profession because they genuinely enjoy educating others and making a difference in young people’s lives, but they also expect stable employment, career progression, and compensation that reflects the importance of their work.
From an employer’s perspective, the best course of action is to make sure that their employees’ extrinsic motivations are well taken care of so that their work does not become a chore and they can continue bringing their best performance on the job.
Autonomy Creates Ownership
One of the most effective ways to predict long-term motivation is surprisingly simple: people want some level of control over how they work.
Autonomy does not mean having no accountability or being completely independent in all aspects of work, but rather, having enough freedom from a controlling force to feel trusted in making decisions without being dictated at every step.
Think about the difference between two contrasting office environments.
A well-oiled machine; everyone knows their place, what is expected of them, and how to do it.
A loosey-goosy environment, with laid-back guidelines, but more trust & confidence in their employees to figure out how to get the work done, even in a crisis.
Both have equally competent workers, but which one do you think has the potential to create truly motivated employees?
Well, let’s answer this question by saying ownership breeds motivation. People who have a sense of ownership in their work are more likely to think beyond what is asked of them and how they can make a difference. They see a problem before it is brought to them and take initiative in fixing it. They think beyond their job title and do the work because they want to, not because they are told to.
As can be seen, this has absolutely nothing to do with accountability or lack thereof, but rather the feeling that they have a personal investment in what they do.
Trust fosters a sense of ownership, and that leads to motivation, or in a more modern-worded take: people want to feel that they have a say in how they do their work.
Mastery Makes Improvement Rewarding
Think of any skill that you’ve learned over the past weeks, months, or years: driving, cooking, programming, writing, teaching, or playing an instrument.
At first, you were most likely, probably not very good. You must have made lots of mistakes, and the work was hard, but THEN…then something magical happened. You started to get better. Things that were once hard became easy, and problems that seemed impossible became doable.
This stoked a warm feeling deep inside, and your brain got hit by wave after wave of dopamine as you neared the solution to your challenges. The feeling only got greater as you saw yourself improving. Psychologists call this urge to improve mastery.
Many companies fail to realize how important mastery is. Most people don’t just want a job. Some do, but eventually, after many dreary eves pass, even such individuals crave more.
They want a career
They want to learn and grow
They want to be challenged
They want to become experts in their field
They want to get better every day
If you stop challenging your employees, you’ll start to see a drop in curiosity. They’ll still be putting in the hours, but they’ll feel like they aren’t really accomplishing anything, and your ambitious employees will get hit much harder by this than the average staff member.
That’s why companies that invest in making sure their employees are constantly learning and improving usually see much more than just an increase in technical skills. They send a message to their employees that they care about their future.
In other words, employees are much more likely to stick around if they feel like they’re constantly improving.
Purpose Gives Effort a Reason
There is this phrase that most people never actually get to experience and is uttered in almost every mission statement: “Our people are our greatest asset!”
(If good taste would allow it, they’d add 3 !!!, and then the next company would do 4, and soon it would turn into an !-measuring contest)
Purpose, as a concept, has followed suit much in the same way, sadly. It has become one of those hollow words that is overused in the corporate world, to the point it has become a meme.
It is lamentable because a sense of purpose is one of those things that can be incredibly motivating for people. Purpose doesn’t necessarily mean that you’re doing something that will change the world. It just means that you know why you’re doing what you do.
A customer service rep who helps angry customers return products
An engineer who makes the widgets that people use every day
An accountant who keeps the company’s finances in order
A janitor who ensures that the hospital is a clean environment for its patients
An IT technician who keeps the systems running so hundreds of colleagues can do their jobs without interruption
A warehouse worker who ensures that products reach customers accurately and on time
They might not all be earth-shattering jobs, but they all have value, a sense of purpose, meaning, and impact on the world. What’s important is to realize that the thing they’re doing isn’t just something that they do for the sake of it. It needs to be something that they do for a reason, a purpose – that’s when it becomes transactional: do this for me, and I’ll give you that.
It’s not a bad system, and there’s nothing wrong with it. For some people, that’s all they need. For many people, though, eventually, it becomes dissatisfying. They stop caring about doing the thing and start caring about why they should do the thing. That’s when the “I just want more money” becomes a problem. That’s also when people stop thinking about the task at hand and start thinking about why they should even care about it.
It’s much harder to answer that question with a raise because money can’t achieve that. It can’t tell you why you should care about what you do. It can give you a reason to do it, but not a reason to care.
Money talks to your wallet. Purpose talks to your soul.
The Hidden Motivators Organizations Overlook
By now, you should already know that motivation is not produced by a single source. It is generated through a multitude of interactions, and it can be created or destroyed by hundreds of tiny occurrences. Pay and perks matter, as does autonomy, professional development, and purpose.
However, there are additional factors that have a significant impact on an employee’s motivation and engagement in the workplace in the long run. The crucial point is that these factors are rarely mentioned during job interviews: they are usually discussed in exit interviews.
Fairness Builds Trust
Imagine two similar employees: same salary, similar-ish work, equivalent ratings. Yet, out of the two, one always seems to get the plum assignments, public praise, endless cheer, and opportunities for promotion.
Now, the question at hand becomes: how long until the other begins to ask pungent, uncomfortable questions? Not long, I’d wager.
This is due to the fact that one factor stands out as an extremely powerful motivator: the perception of fairness.
Fairness in the workplace goes far beyond pay, as important as that is. It is the great equalizer, and it also entails consistency in how decisions are reached for things such as promotions, assignments, workload, kudos, mistakes, and communication.
People may be willing to accept outcomes they do not like, but they are much less tolerant of confusing circumstances. When it comes to explaining a decision, transparency seems to have an enormous impact on whether people will accept it. Give people enough information that they can understand a choice, even if they are not happy about it, and they will be much more likely to accept it than if they are in the dark and suspect something negative might be lurking.
When employees begin to feel as if they are getting less than they deserve, it is rarely productive to argue the point directly. Compensation issues, for example, are often emotional affairs, in which employees are apt to ask themselves not only how much they are being paid, but whether they are being treated fairly. By that, they often mean, how does my employer feel about my contributions?
Compensation is one of those tell-tale signals of how much value a company feels like it is getting out of its employees. The company is constantly sending out signals via compensation levels, and the truth is often hard to disguise, even when no one is discussing it openly.
Recognition Validates Contribution
Recognition is one of the most misunderstood concepts in modern management.
Many companies have turned it into a token, almost-jokey gesture: a monthly award, a thank-you note, an article in the company newsletter, a gift card.
While all these things may have their value, they fail to address the most important aspect of recognition: the simple fact that people care whether what they do matters. Recognition is valuable because it reassures employees that their work has not been in vain.
It is a response to the question “did what I do actually make a difference?” which is especially important when talking about demanding, difficult jobs.
“If I put my heart and soul into a challenging task and, when it finishes, nothing is said about it, does it mean it was not worth doing? Maybe it does not matter to me, but most likely, it will affect my motivation to do similarly demanding work in the future.”
Recognition is valuable because it reassures employees that someone has noticed and that what they do matters to somebody. It should be noted, however, that recognition, in many ways, is a tool that can only be used effectively in a good workplace.
If the company culture is unhealthy, and employees feel like their work is not valued, recognition gestures will do little to reassure them. They will see them as hollow tokens, attempts to manipulate them.
Recognition cannot fix rotten foundations. It cannot compensate for constant underpayment or lack of appreciation. It should not be used in bad faith, as a way to cover up management’s mistakes.
In simple, clear terms: pizza parties don’t fix broken workplaces.
Progress Is One of Motivation’s Strongest Fuels
Think about the last time you went all out trying really hard on some project. Now imagine there are two possible outcomes:
You see results. Things are coming together. You are improving. Things are getting done.
Despite your best efforts, things seem to get nowhere. One week seems much like the next. Problems arise, often in the same places. Goals appear ever distant, and your efforts seem to vanish up the memory hole, never to be remembered again.
Which would make you feel better? Which would make you want to keep working? How do we feel when we are reminded that too many workplaces are inadvertently creating the second situation for their employees?
Too many of us are working without the benefit of seeing the value of our efforts. Studies on worker motivation have shown that a sense of making progress is one of the most important factors in influencing positive emotional reactions toward work. That doesn’t mean we should expect huge leaps forward or giant achievements.
It means that people need to see some form of forward movement to feel good about what they do. It could be small steps. It could be baby steps, but people need reassurance that they’re actually getting somewhere. Some progress makes people feel their work has value. Without it, everything seems pointless.
That’s why effective leaders acknowledge and celebrate progress all the time, not just when people reach the end goal. It’s not that people don’t need goals or don’t care about rewards, but because forward movement answers the silent question, “Are we really getting somewhere?“
As long as the answer is “Yes,” then people can remain motivated. When the answer starts to sound more like “I’m not sure,” then well…that can be demotivating.
People don’t need to finish the race each and every week. They just need to know they are still running towards the finish line.
Burnout Isn’t a Motivation Problem
Burnout is often attributed to something that happens when employees “just lose their motivation.” That’s a reductive view of what it means to experience burnout. It isn’t that sudden; it usually results from a slow process of exertion with decreasing perceived psychological return.
The workload increases, or the rewards for said work decrease, and the worker’s relationship with their work deteriorates. People begin to feel ineffective, powerless, unable to accomplish the things they think are important, even if their work itself doesn’t change.
People who suffer from burnout continue to perform their tasks because they feel like they have to, not because they feel like it has meaning or value. Most people can handle hard projects, long working hours during important periods, unexpected problems, and high levels of responsibility. What they can’t handle is feeling like all of their hard work is wasted, stagnant, irrelevant, or unnoticed.
When companies have people who are burned out, the default question is rarely “how can we incentivize these people to perform better?” but rather “what made them feel so devalued in the first place?” These are two completely different lines of inquiry with very different solutions.
Final Thoughts
This article started with a simple myth: money is the greatest motivator.
Like many myths, this one has a grain of truth. Money does matter – it satisfies basic needs, reduces stress, attracts people to the organization, and indicates whether the company cares about its employees. In other words, ignoring the importance of money would be foolish.
However, it is only one factor influencing workers’ motivation. A more critical source of motivation is an individual’s perception of their work and how they are treated within the workplace.
Employees are more likely to be motivated if they realize their efforts make a difference, they improve themselves, their performance is valued, they can rely on their colleagues, and they are not stuck doing the same tasks. Such motivation is fragile, as it takes care to create the aforementioned circumstances.
Many people think of motivation as a binary indicator: either individuals are motivated to work, or they are not. In reality, motivation is more of a continuum. This is why people need to feel their contributions are worthwhile, and they can rely on their colleagues. Organizations should focus more on nurturing a culture in which employees understand that their work matters. It will enable them to achieve greater productivity as motivated individuals will be more likely to go above and beyond.
In today’s exceptionally modern times, there is no reason organizations shouldn’t strive to make employees feel that both money and non-monetary aspects of work are adequate. After all, people are unlikely to quit doing their tasks because they do not enjoy them. They are more likely to leave if they perceive no value in their efforts. People only experience dissatisfaction when their efforts do not provide them with rewards they want. Therefore, an organization should ensure that employees feel rewarded both intrinsically and extrinsically.
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Motivation is more complex than a paycheck. Build the knowledge and skills to manage employee performance with a broader understanding of what drives people at work through Certified Employee Performance Management
Perhaps a customer service associate started making mistakes.
Mayhaps a project that seemed like it was a winner suddenly tanked.
Perchance a government department that consistently hit its KPIs suddenly started missing them.
Possibly a construction site that was on track suddenly started falling behind schedule.
Presumably a real estate project that looked like a sure success suddenly stopped attracting buyers.
What’s the first question that pops into most organizations’ minds at that very instant?
“What’s wrong with the employee?!”
It can be a myriad of matters, ranging from motivation, discipline, lack of care, or just a rough attitude. It’s an easy question to ask. When things aren’t going well, after all, our first inclination is to examine the person at the center of the work. It feels equally easy to answer, too. Unfortunately, it’s often the wrong question to ask. In our last piece, we examined the oldest myth in performance management – the one about great performers simply being born with more talent. While talent plays a role, it’s not the full picture. You can develop skills, acquire knowledge, improve abilities, and gain experience nowadays more than ever before in the history of humanity. So, if performance isn’t just about raw talent, though, what is it about? The answer is a bit more intricate and poses several interesting questions, more than many people like to admit, because often, questions don’t give answers, but open up more of the same. Performance isn’t created in a vacuum. It’s not the sum total of how smart, hard-working, or driven someone is. Performance is moreso the result of dozens of forces (seen and unseen) acting upon a person on a daily basis. This has been repeated thousands of times, but it’s valuable to look at it from different angles.
For example, think about growing a plant. If a plant isn’t growing well, we don’t assume it’s a “bad plant,” with a “bad attitude” or a “lack of drive.” We examine everything that has to do with the plant: the soil, sunlight, water intake, temperature exposure, and whether anything is getting in its way. However, when an employee isn’t performing well, we tend to examine the person first. Sometimes that’s appropriate; that much is true. Other times, more often than not, the environment has already created the conditions for poor performance, and this is the myth that we aim to bust in this article: employee performance isn’t primarily determined by attitude. All of the internal elements matter: attitude, effort, accountability, and resilience. Yet, in addition to all these, we also have external elements: bosses, peers, organizational systems, cultures, and outside influences. Understanding the role these external forces play doesn’t mean absolving employees of their responsibility, but rather explaining their performance in relation to all of them. Once we can explain performance by taking into account every layer that can sway it one way or another, we can finally do something about improving it.
Layer 1: The Individual – Capability Is Only the Starting Point
You can’t talk about employee performance without talking about the employee (duh). Each employee comes into a workplace with a unique set of knowledge, technical skills, experience, personality, motivation, and natural talents that undoubtedly play a role in how well they perform. To ignore that fact would be as foolish as saying talent doesn’t matter at all…which is where something breaks in a lot of organizations, and the collective thought bubble pops. If someone isn’t performing, the quick assumption becomes the person lacks something, and they need MORE of something else: more motivation, more discipline, more commitment, more resilience, more passion, more energy, more footwork, like the workout videos of old. Now the environment has become a weird gymnastics exercise of jumping through mental hoops to reason something that might be true, but may not, into a definitive state of truth. One of the most surprising findings from recent research on workplace wellbeing is how much of an employee’s performance is affected by things that their manager may never see. Research from Humankind found nearly 73% of employees felt personal stress was hurting their ability to focus, engage, be motivated, make good decisions, and perform well at their job. Whether it was finances, poor sleep, childcare duties, health concerns, or emotional burdens, these personal factors were quietly depleting the cognitive bandwidth individuals have to deploy at work. None of these struggles will ever show up on a performance review.
A manager doesn’t see the parent who spent the night up with a sick child.
A manager doesn’t see the employee who’s losing sleep over bills.
A manager doesn’t see the hours spent in transit to a job, taking care of aging parents, managing relationship drama, or coping with illness.
What a manager does see is work that’s slowing down, deadlines being missed, less enthusiasm, and lower productivity. By the time that these performance indicators appear, the underlying causes may have been developing for weeks or months.
This is not to say organizations should be tasked with fixing every one of a person’s personal challenges (that’s neither realistic nor appropriate), but it does mean that we must stop deluding ourselves into thinking that individuals somehow become different human beings the moment they enter our buildings. Employees don’t leave their lives at the door; they merely get better or worse at hiding them. Even if there’s nothing overtly going on in a person’s life, we fall into another trap when discussing performance. We often assume that if someone has enough talent, performance will automatically follow, but that’s not how real, everyday life functions. We’ve covered previously how Gallup has long pushed for the argument that while natural talent is a relatively stable proclivity, knowledge and skills can be acquired over time, rendering talent-only advantages null.
Thus, while hiring individuals with a high natural ability does increase your chances of having a top performer, it’s far from a guarantee. Likewise, a person with only average natural abilities may exceed expectations if they’re placed in the right role, have the right skills, and work within the right environment. The same principle is emphasized by management professor Morten Hansen in his research of thousands of professionals. Hansen discovered that how people work accounted for more of the difference in performance than almost anything else. While talent mattered, it was far from the single largest differentiator. High performers didn’t simply outwork the competition; often, they were outworking their competitors more strategically, since capability only sets potential; it doesn’t guarantee performance. Two people with very similar backgrounds and intellectual capabilities can perform in vastly different ways. If we’re only focusing on the person, those discrepancies can seem baffling, yet in truth they are being influenced by forces that we have yet to examine. This is because, after the person, perhaps the single biggest factor affecting performance is their manager.
Layer 2: The Manager – The Greatest Performance Multiplier or Subtracter
If you ask someone why they love working for their company, they’re likely to mention their team or their opportunity to learn & grow. If you ask someone why they left, you’ll notice that a very consistent answer emerges: “my manager.“
Oh, the age-old truism that people don’t leave companies, they leave managers. It’s not universally true, of course, but there’s a reason this saying endures. Managers are our window onto the company. They are responsible for our expectations, the feedback we receive, our access to opportunities, the obstacles we must overcome, and the emotional temperature of the place we work each day.
Two employees can be in the same company, earn the same salary, work with the same policies, have the same benefits, and yet have drastically different experiences because they have different managers.
Psychologist Amy Edmondson has devoted decades of research to identifying a critical ingredient of high-performing teams: psychological safety. In a nutshell, it’s the belief that people can be their genuine selves at work without fear of embarrassment or punishment, can take risks without fear of repercussion, and can challenge one another without damaging personal relationships.
Notice what psychological safety is not: it’s not a lowering of standards. It’s not about avoiding accountability. It’s not about making people comfortable all of the time. Instead, it is about enabling them to contribute without fear of appearing incompetent, even if it feels inherently risky. This is a crucial distinction, because fear changes our behaviour. When we’re afraid of appearing incompetent, we stop asking questions. When we’re afraid of being criticized, we stop pitching new ideas. Eventually, our performance begins to dip because fear has begun to eclipse curiosity.
In fact, a well-known Google study called Project Aristotle, which investigated the reason behind their consistently high-performing teams, came to a strikingly similar conclusion. After scrutinizing hundreds of teams, Google’s researchers found that the most important factor in success, more so than any other, was the degree to which teams were psychologically safe. The other factors (dependability, role clarity, meaning, and impact) were all secondary, built on the foundation of safety.
We invest considerable money and effort trying to find and hire exceptional individuals. Yet, very few of us invest the same resources in creating conditions that allow those individuals to actually achieve their exceptional potential. Moreover, psychological safety is just one factor. There are many others, such as recognition, constructive feedback, trust, autonomy, and role clarity, just to name a few.
Employees who have to second-guess priorities, wait days for simple approvals, or are terrified of making small errors spend the bulk of their mental energy protecting themselves rather than doing meaningful work. Good managers work hard to minimize that friction, while bad managers create it.
In short, the management of performance doesn’t just happen in annual performance reviews. It’s influenced every day by the culmination of dozens of seemingly small interactions between a manager and their reports. Eventually, those interactions ripple out beyond individual relationships and shape the team itself.
Layer 3: The Team – Why Great Individuals Can Still Become Average Teams
Consider five of the most exceptionally gifted individuals and gather them together in one room. Common sense would suggest this would inevitably result in an exceptional team. In reality, things get complicated.
We’ve all experienced teams that, while absolutely flush with talented, experienced professionals, somehow stumble from one deadline to the next. Their meetings become an exercise in repetition and good ideas fester in the far corners of their minds, never shared, never discussed. Elsewhere, teams comprised of average employees somehow manage to turn out exceptional results like high-speed conveyor belts.
When the environment that a tight-knit group builds together starts to shape their work experience, performance starts shifting from individual to collective. By the very nature of work in an organization, no team can avoid this, and every one nurtures its culture, willingly or unconsciously. Over time, everyone learns what gets rewarded, what gets ignored, and what gets punished. Most of these lessons don’t make their way into employee handbooks, but they often exert a far stronger influence on behaviour than any formal policies.
Every team has rules, but what’s more interesting is how many were never written down.
Maybe it quickly becomes apparent that it’s not worth disagreeing with the boss.
Perhaps people learn that asking for help is interpreted as a sign of weakness.
Possibly they notice the loudest voice in the room always wins the discussion, regardless of the actual quality of the ideas presented.
Mayhaps people learn that taking risks is celebrated only when they succeed, but punished harshly when they fail.
Perchance it becomes obvious that keeping your head down and avoiding difficult conversations is the safest way to get ahead.
None of this has to be codified in an internal policy. People simply observe it, adapt to it, and then, over time, pass it along to new team members. This is why culture can spread like wildfire. Almost nobody changes because someone announced new values at an all-hands meeting, but everyone changes when they watch how behaviour is rewarded or punished.
Psychologists call this social proof.
People look to those around them to signal how to behave, particularly in times of uncertainty. In workplace settings, that means employees often adopt the norms of their colleagues long before they consider their company’s stated policies.
If everyone in a team talks freely in meetings, then new team members are usually inclined to speak freely as well. If everyone in a team falls silent when something goes wrong, new team members learn that silence is golden.
Another invisible force comes in what researchers call emotional contagion.
Emotions spread, and that affects team performance. If you’ve ever worked in a team environment, you’ve undoubtedly seen it. A perpetually pessimistic person can single-handedly drain the energy of an entire department. Conversely, an optimistically positive and solution-oriented teammate can boost everyone’s motivation during challenging times.
Managers certainly affect the emotional climate of their teams, but the teammates amplify it day by day. A culture of trust or fear becomes a self-reinforcing loop. This leads into another point taken from Project Aristotle.
Google’s Project Aristotle identified dependability right after psychological safety in their findings.
Trusting your teammates goes beyond their ability to emotionally support you; it involves relying on their execution. Few things sink a team’s performance faster than unpredictability. When employees are unsure about whether their teammates will come through on their assignments, they start to contingency plan or hoard information just in case. Self-protection, rather than collaboration, becomes the default.
The reverse is also true: when employees are confident their teammates will come through, coordination is smoother, and meetings are more efficient as trust replaces excessive oversight.
This is perhaps the least understood ingredient in the recipe for high-performance teams: they don’t eliminate conflict – they eliminate unhealthy conflict.
High-performing teams do disagree. They do question assumptions, debate ideas, ask uncomfortable questions, and clash in their value systems. However, they do so in a way where disagreement isn’t a personal affront. Disagreement becomes a function of the problem-solving process.
That’s what psychologist Amy Edmondson found over and over again in her studies as well: teams that had a high level of psychological safety didn’t necessarily commit fewer errors than others; they actually reported more errors because they were way more willing to admit they had made a mistake. The result wasn’t decreased performance; it was faster learning.
Ironically, cultures that punish mistakes foster conditions where mistakes grow costly and become harder to fix. Hidden problems are invariably more dangerous than problems in plain sight.
As you might have noticed, by this point, a pattern is emerging.
So, what does all of this lead to?
Individuals matter. ✔️ Managers matter. ✔️ Teams matter. ✔️
Yet there is something bigger. They all exist within something larger – the organization.
Layer 4: The Organization – The Structures Behind the Results
Companies love to measure outcomes: sales, revenue, productivity, customer satisfaction, profit margins. What companies don’t really love to measure is the systems that drive those outcomes.
Systems
This is an issue because employees don’t operate in isolated moments; they operate within systems, and those are the quiet forces that make succeeding easy or painfully hard.
Think about how many performance issues are actually system issues hiding in plain sight:
An employee misses deadlines.
Is it poor time management?
Or was that employee’s priorities changed three times in a single week?
A project is dragging.
Is the team unmotivated?
Or does every single decision need to go through a four-department approval process?
Innovation has disappeared.
Are your people less creative?
Or have they learned that challenging the status quo is more risky than rewarding?
It’s all too easy to chalk performance problems up to individual accountability because individual behaviour is visible. Systems are much harder to see, but they often exert much more influence.
Management pioneer W. Edwards Deming famously asserted that 95% of organizational problems are systemic in origin. Accountability matters, yes, but he insisted that people cannot perform better than the systems they are asked to work within.
Just think about your local governmental bureaucracy.
It functions chiefly by rulesets. We need rules. Rules are good – they provide consistency, mitigate risk, offer direct A-to-B avenues for solutions, and enable scalability.
However, we reach a tipping point for every added approval, every unnecessary report, every meeting, every administrative layer, every conflicting process. When rules outweigh the necessity for which they exist, they begin creating friction. They shift focus away from delivering value and toward navigating the organization itself. Eventually, the process itself becomes the focus, not the work.
Role Clarity
Very few things sap performance faster than confusion around what’s expected.
Who’s making this decision?
What does successful work look like here?
Which of the two conflicting priorities should I tackle first?
When expectations are unclear, even talented employees will pause before acting for they fear doing the wrong thing. Studies have shown that clear roles correlate strongly with employee engagement, confidence, and overall performance. Role clarity frees employees to focus energy on solving problems instead of figuring out the answers.
Politics & Culture
Life is a series of politics at play, and organizations are part of daily life.
With that in mind, however, issues arise when politically motivated behaviour are more rewarded than productive behaviour.
If a promotion system reliably favors visibility over contribution
If challenging colleagues’ ideas is riskier than agreeing
If employees are incentivized to compete with one another instead of solving problems collaboratively
If protecting your own department is rewarded more than helping the organization as a whole
The organization trains people that success is a result of politics, not formal policy.
This leads to a distortion of culture.
Culture, much like politics and behaviour, is learned. Despite an army of mission statements, posters, core value initiatives, and well-wishing sticky notes, organizational culture isn’t created by what organizations say they are, but what they do.
Culture is built on what organizations repeatedly tolerate, reward, punish, or ignore. That’s why two companies can claim the exact same values, but have wildly different experiences for their employees. Organizational culture isn’t the motto on the wall; it’s what happens when no one’s watching. These hidden structures influence performance daily, often without managers’ awareness, since they are felt & lived, rather than examined in a performance sheet.
Yet, even organizations with excellent managers, healthy cultures, and efficient systems have one final, insurmountable challenge: people are, at heart, human beings who exist long after clocking out.
Layer 5: The World Outside Work – The Part Performance Reviews Never Measure
There is one last layer to performance, which organizations know conceptually, but often fail to account for realistically: life. It almost seems self-evident, yet, a pervasive, almost subconscious bias exists in the workplace that assumes employees somehow leave their personal lives at the door.
They didn’t – your employees didn’t stop being parents the moment they logged onto Microsoft Teams. They didn’t stop worrying about a sick loved one just because it was Monday morning. Financial worries don’t cease at 9 AM. Anxiety, grief, burnout, sleep deprivation, relationship troubles, and the many other stresses of being human don’t simply fade away as business hours commence.
The point is that people don’t perform in a vacuum; they perform as people. Recent research from places like the Harvard Business Review underscores the impact of external stresses. Studies have demonstrated a direct link between personal stress and difficulties with focus, decision-making, motivation, and engagement.
By the time an employee’s performance visibly dips, mental energy needed for problem-solving, collaboration, and creative thinking may have already been diverted to managing these personal issues for weeks or months. Of course, this doesn’t mean employers need to become therapists or feel personally responsible for their employees’ personal problems. Boundaries are important, and so is recognizing that between 9 and 5, we don’t automatically morph into machines.
Organizations that understand this do a better job of not trying to manage people’s lives, and a much better job of not creating undue stress in the workplace.
Flexible work schedules.
Employee assistance programs.
Access to mental health resources.
Realistic workloads.
Predictable schedules.
Empathetic managers.
These aren’t magic cures or arcane sorceries. They simply remove a potential unnecessary source of pressure at work, and they are incredibly important for one specific reason: performance isn’t a flat line.
No one, not even the highest performer, is running at peak capacity every moment of every day for every year. People have seasons, and there are periods where they have tremendous energy, creativity, and focus. Then there are periods where life’s demands briefly require a greater portion of their attention.
High-performing organizations recognize the difference between a temporary dip in performance and a systemic problem. They don’t treat every deviation as a failure; they ask a much more helpful question: “What has changed?”
Sometimes the change is skills or motivation. Other times, it’s work overload. Lastly, on other occasions, it’s just life, and because each of these changes requires a different solution, differentiating is critical.
Treat every issue as an attitude problem, and you won’t fix very many things. Treat every issue as a systems problem, and you’ll neglect individual responsibility. Effective performance management sits somewhere in between. It acknowledges accountability for an employee’s work, while simultaneously recognizing that no work exists in a void because when you zoom out, you see that every layer impacts the other.
A talented employee will be limited by poor management.
A brilliant manager will be hampered by a dysfunctional system.
A great system will see reduced productivity when the people within it are struggling with overwhelming personal challenges.
No one element creates performance alone, rather it’s the interplay of an entire ecosystem that creates it.
Final Thoughts
Organizations have sought the silver bullet for performance for decades: hire better people, pay more, set big goals, measure everything, and reward the top performers.
All of those things count, but they’re only one part of the picture. Performance isn’t a function of talent alone, nor is it just a product of attitude or effort. Performance emerges from the interaction between an individual and their environment.
The individual
The manager
The team
The organization
The outside world
Every one of these levels either builds on an individual’s potential or subtly works to undermine it. This is why explaining poor performance simply as employee error is so incomplete. If a garden doesn’t grow, we don’t just blame the seeds. We look at the soil, the light, the water, the environment.
Organizations should be willing to ask the same questions not because employees shouldn’t be held accountable (they most certainly should be) but because blame without understanding never results in sustained change. The most effective leaders don’t ask, “Who caused this?” They ask, “What conditions created this result?”
Changing your perspective from who did it to what created it changes everything. It shifts performance management from blame to removal of obstacles and turns the manager from an evaluator to a coach. Moreover, it prompts organizations to build systems for employee success instead of relying on individual grit to overcome the odds, and most important of all, it reminds us that performance isn’t usually an individual effort but a collective one at that.
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Performance problems rarely have a single cause. Learn to examine the people, managers, teams, and systems behind the results. Build a more complete approach to performance management with Certified Employee Performance Management.
Employee Performance Management (EPM) is the structured, ongoing process of setting expectations, tracking results, and developing people so that individual effort connects to organizational goals. It is not the annual review form. The review is one meeting inside a much longer cycle that runs from goal-setting through coaching, measurement, evaluation, and reward.
This guide covers:
What Employee Performance Management is, and how it differs from a performance appraisal
How EPM operates across organizational, departmental, individual, and personal levels
Why organizations invest in EPM, and what happens when they don’t
The EPM architecture: the building blocks that connect strategy to a single employee’s daily work
How to run an effective appraisal meeting, including feedback techniques
How EPM connects to talent management, career planning, and succession
Common mistakes organizations make when implementing EPM
What Is Employee Performance Management?
Employee Performance Management is a structured process of planning, measuring, and improving how an individual employee contributes to organizational results. It typically involves setting objectives and KPIs, tracking progress, evaluating results against standards, giving feedback, and using what’s learned to guide development, pay, and career decisions.
Ask a room of employees what “performance” means to them and the answers tend to split down the middle. Some see it as a way to earn a bonus or a promotion. Others describe it as a bureaucratic, time-consuming exercise. In between sit people who say it clarifies their objectives, motivates better work, or builds their competencies. All of these reactions are valid, and they usually reflect how well — or how badly — an organization has built its EPM system. A well-designed system produces the motivating, clarifying version. A poorly designed one produces the bureaucratic, box-ticking version.
That gap is the entire reason EPM exists as a discipline: the same underlying idea — measuring and improving people’s work — can land as either a genuine driver of performance or a resented compliance exercise, depending entirely on how it’s structured.
Performance Management Operates at Multiple Levels
Performance management isn’t a single activity; it operates at different altitudes, each with its own focus and its own tools.
Strategic (organizational) level. Deals with the achievement of overall organizational objectives. This is where mission, vision, values, and 3-to-5-year goals get set, and it’s sometimes called corporate, business, or enterprise performance management.
Operational (departmental) level. Puts the accent on achieving departmental objectives inside the organization, translating strategy into functional plans. Dashboards are the tool of choice here.
Individual level. An integrated system meant to improve the performance of each employee, with responsibilities aligned toward the achievement of shared goals. This is the level most people mean when they say “performance management.”
Personal level. Full self-management across life areas — a structured approach an individual applies to their own balance and development, separate from any organizational system.
A useful test: an executive board meeting to review strategy is strategic; monitoring overtime or deploying work activities toward individual objectives is individual; department restructuring based on established goals is operational; tracking your own steps per day is personal. Confusing these levels — running individual-level conversations with strategic-level tools, for example — is one of the fastest ways to make an EPM system feel disconnected from real work.
Why Employee Performance Management Matters
EPM earns its place in an organization when it changes behavior, not just when it produces a score. Done well, it:
Improves quality of work by defining clear expectations for each role
Brings better understanding of work processes, so employees know not just what to do but why
Aligns the efforts of each employee to corporate strategy, closing the gap between the boardroom and the desk
Reduces subjectivity in decision-making around pay, promotion, and development
Assures continuous learning and improvement of individual performance over time
That last point matters more than it looks. The same measurement activity can serve very different purposes: measurement for improvement and measurement for understanding your role build trust; measurement mania, measurement for control, and measurement for sanctioning erode it. Two organizations can run an identical KPI dashboard and get opposite results, depending on which of these purposes the dashboard actually serves.
The shift in communication style tracks the same divide. Annual evaluations built on one-way, unilateral, manager-to-employee communication tend to feel punitive. On-going performance discussions built on two-way, bilateral dialogue and feedback tend to feel developmental — even when they’re measuring the exact same KPIs.
The EPM Architecture
Employee Performance Management doesn’t function as one form or one meeting; it’s a set of connected building blocks that carry strategy down to an individual’s daily work and back up again as evidence.
At the top, the Strategic Plan at organizational level and the Operational Plan at functional level feed a Competencies Framework and a Behaviors Framework, both anchored in a formal Performance Management Policy.
Those frameworks, together with the job description, are used for establishing performance criteria — the objectives, KPIs, competencies, and behaviors an individual will be measured against — which in turn shape that person’s career plan.
Through the year, performance is tracked via an individual performance (IP) scorecard, a daily log, competencies and behaviors observations, and informal feedback — the raw material for the formal IP evaluation.
That evaluation feeds a development plan (linked to a training policy and training plan) and a set of reward-and-recognition decisions: a rewards policy, a pay-for-performance plan, succession management, and employee engagement.
Four levels sit underneath this architecture:
When this architecture is built correctly, a single employee’s daily task log can be traced all the way up to a strategic objective — and a strategic objective can be traced back down to the specific behaviors expected of the person doing the work.
The Employee Performance Management Cycle
At its core, the EPM cycle runs through five stages: planning, monitoring, developing, rating, and rewarding.
Performance setting meeting. The manager and employee set performance objectives, set development goals, and agree on the resources the employee will need. This is where standards get communicated and both assessor and assessed are prepared for what’s coming.
On-going performance evaluation. Through the year, actual performance is measured against the standards set. This isn’t a single event — it’s continuous monitoring, informal feedback, and course-correction.
Mid-year review. Results to date are discussed, formal feedback is given, and improvement opportunities are planned. Both manager and employee prepare for this meeting in advance. Its results do not influence the year-end evaluation — it exists purely to course-correct.
End-of-year appraisal. Past performance is discussed, potential is identified, and career path and development aspects are addressed.
Reward. When standards are reached, the cycle closes with recognition — tied to a rewards policy and, often, a pay-for-performance plan. When standards aren’t reached, the cycle instead produces improvement measures and feeds back into planning for the next cycle.
Underneath every step, four roles carry distinct responsibilities:
The manager discusses objectives, KPIs, and standards with the employee; aligns responsibilities; provides resources; evaluates performance and gives feedback; conducts appraisal meetings; and fills in scorecards.
The employee contributes to setting their own objectives and the methods to reach them, prepares self-evaluations, and contributes to setting their own development measures.
Senior management establishes business strategy, validates appraisal results, manages disagreements between employee and manager, and validates the decisions that come out of appraisals.
HR coordinates the administrative process and provides support and counsel to both sides.
Measuring and Rating Performance
Most EPM systems combine three inputs into a single performance score: results (KPIs), competencies, and behaviors. Two common ways to combine them:
Weighted average: KPI score × x% + Competencies score × y% + Behaviors score × z%, where x + y + z = 100% — for example, weighting results at 70%, competencies at 20%, and behaviors at 10%
Results themselves are usually scored against a target band — results meeting target (typically above roughly 95% of target), results in a tolerance interval (roughly 90–95%), and results far from target (below roughly 90%). Overall performance is then translated into a rating scale, commonly a five-point scale running from Unsatisfactory through Needs Improvement, Meets Expectations, and Exceeds Expectations, up to Exceptional. Competencies and behaviors are frequently rated on a similar five-point frequency scale (Never through Always).
These scores are also the raw material for talent-review tools like the 9-box grid, which plots current performance against future potential to guide succession and development conversations.
Running the Appraisal Meeting
The appraisal meeting is the most visible part of EPM, and also the part most likely to go wrong if it isn’t structured. A well-run meeting typically follows this shape:
Opening: create a positive climate, review the meeting’s objectives, and agree on its structure
Performance analysis: go topic by topic through results and appreciation, discuss causes and consequences, and only move to the next topic once agreement is reached — without negotiating the facts
Improvement initiatives: set concrete steps by mutual agreement, support the employee in achieving future performance, and put the agreement in writing
Useful questions to structure that discussion include how the employee reached their targets, what factors helped or hurt the results, how they assess their own performance, which competencies they used most (and least), and what they’d suggest to remove obstacles going forward.
Feedback quality inside that meeting matters as much as the structure. The research is blunt about the stakes: companies with regular employee feedback see meaningfully lower turnover, and highly engaged employees report getting feedback far more often than disengaged ones — while employees who are ignored by their manager are roughly twice as likely to disengage. Most employees say they want more feedback than they’re getting; most managers believe they’re already giving enough.
Good feedback, whether reinforcing or redirecting a behavior, tends to follow the same shape: describe the specific behavior, explain its impact, listen to the recipient’s reaction, and land on a concrete plan for what happens next. Vague praise (“you’re doing a great job, keep it up”) and personal criticism (“don’t you know anything about this?”) both fail for the same reason — neither one tells the employee which specific behavior to repeat or change.
EPM and Talent Management
Performance data doesn’t stop at the appraisal. It feeds directly into talent management: career planning, coaching and mentoring, internal talent mobility, succession management, and leadership development. An employee’s demonstrated competencies and results are the evidence base for their career plan and for whether they’re a candidate for succession into a more senior role. Succession management, in turn, protects the organization against the risk of losing critical knowledge and capability when someone leaves — building a pipeline rather than scrambling to fill a vacancy after the fact.
Common EPM Mistakes
A handful of failure patterns show up repeatedly:
Treating it as an annual event. A system built around a once-a-year form, with no on-going monitoring or mid-year check-in, turns into a post-mortem rather than a tool for real-time course correction.
One-way communication. Performance management delivered top-down, without dialogue, feels imposed rather than owned — and employees disengage from targets they had no hand in setting.
Measurement without purpose. When KPIs are tracked for control or sanction rather than improvement, the system breeds defensiveness instead of better performance.
Vague feedback. Praise or criticism that doesn’t name a specific behavior gives the employee nothing to repeat or change.
Disconnected levels. When individual objectives aren’t visibly linked to departmental and strategic goals, employees can’t see why their work matters — and the architecture that’s supposed to connect strategy to daily work breaks down.
No follow-through. An evaluation that doesn’t feed a development plan, a reward decision, or a career conversation is data collected for no purpose.
Most of these trace back to the same root problem: a system designed around administering a form, rather than around the ongoing manager–employee dialogue the form is supposed to support.
Frequently Asked Questions
What is the difference between performance management and a performance appraisal? The appraisal is a single meeting — usually the end-of-year evaluation. Performance management is the full cycle around it: planning, monitoring, developing, rating, and rewarding.
How often should performance be reviewed? Most modern EPM systems combine a formal planning meeting and a formal year-end appraisal with an interim mid-year review and continuous informal feedback in between — rather than relying on one annual conversation.
What’s the difference between a competency and a behavior in this context? Competencies are the skills and capabilities an employee brings to a role. Behaviors are how they’re expected to act day to day in pursuit of their targets, usually defined in an organization-wide behaviors framework that applies to all personnel.
Who owns the performance management process? Senior management sets strategy and validates outcomes, HR coordinates the administrative process and offers support, and the manager and employee jointly own the day-to-day objective-setting, tracking, and feedback.
How does EPM connect to pay? Through a pay-for-performance plan that’s explicitly linked to the individual performance evaluation — one of several outputs, alongside development plans, training plans, and succession decisions, that come out of a properly closed EPM cycle.
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Editor’s Note: This guide draws on the Certified Employee Performance Management Professional course curriculum (The KPI Institute, 2022) and the HR Performance Management System Toolkit (The KPI Institute, 2021).
Most organizations love the idea that strategy happens at the top: executives develop it, and employees on the ground execute it. Things somewhere in the middle just work. We wave our hands, and like magic, processes fall into place.
Well, that’s not exactly true. Somewhere in the middle is exactly where most strategies succeed or fail.
Across all industries and studies, one pattern rears its head again and again: well-designed strategy rarely translates into actual output. It isn’t so much that the vision is wrong, per se; it is simply a matter of losing it along the way, of it being diluted or misunderstood.
That gap between intent and output lies where middle managers work. Enabling or neglecting them often dictates whether change will take hold or fade under its own weight.
In this article, we delve into this critical role by drawing on diverse views on change management, strategy execution, and leadership behaviours. Each section looks at this issue from a different angle; all reflect the same truth: middle managers aren’t merely intermediaries-they are the mechanism by which strategy takes shape in organizations.
The Strategic Translation Layer: How Middle Managers Turn Vision into Action
While an organization’s strategy defines what it wishes to achieve, it is middle managers who help transform that vision into something understandable and executable.
They occupy a unique position in organizations: positioned above are executives focused on strategy and priority-setting; below them, employees face the challenges of day-to-day operations. It is this dual orientation that grants them the detail executives often lack: context.
They are attuned to what leadership wants and what employees can realistically achieve.
Their ability to both translate strategy into executable plans and adjust plans to the realities of the work lies in their interpretation and adaptation of information from above and below. It is quite akin to alchemical transformation.
Studies and research consistently cite the translation role as critical. Employees’ understanding and belief in strategy correlates with performance gains, whether measured by revenue, engagement, job satisfaction, or customer experience. However, almost every time, without fail, understanding tends to stem not from the top but from above.
The irony is that strategy often never reaches the middle clearly. Managers often say they are not entirely confident in communicating strategy because they don’t fully understand it themselves. This deficit can ripple outward; the entire organization becomes unclear when the middle is unclear.
In sum, strategy fails not at the design stage, but at the translation stage, and this translation layer usually resides with middle managers.
From Resistance to Alignment: How Change Spreads Organically Inside Organizations
Despite having a strategy at the top, people will rarely fall in line spontaneously. Change within organizations is not a rational, top-down endeavor; rather, it is inherently social and emotional.
Initially, there is likely a division among middle managers. Some champion the new strategy, others defend established procedures. Each response is a common feature of this stage. However, with time, a subtle change occurs.
Initially reluctant middle managers may come to realize that even deeply cherished practices and systems will not persist in their current form without adaptation; innovation may actually be the means of preservation. As this occurs at the individual level, influence begins to be driven by credibility rather than by authority alone.
When a well-respected middle manager adopts a new perspective, it serves as an influential model, drawing followers and shaping the organization’s discourse around the strategy. The transformation begins to gain organic momentum, spreading not through directives, but through personal relationships and evolving consensus.
Eventually, the organization may realize that innovation and tradition are not necessarily antithetical and that alignment can provide the foundation for bridging them.
Organizational change is an emergent phenomenon rather than an announced decision. It evolves in the middle layers of leadership. As a result, organizational change rarely occurs rapidly; however, it is usually the long, slow process within middle management that results in the enduring transformation of an organization’s overall culture.
Why Strategy Fails: The Under-Discussed Problem of Alignment
Executives tend to view strategy execution as a technical problem – a matter of disciplined execution. In reality, it is almost always an alignment issue.
A) Vast studies have consistently shown that many of a strategy’s failed initiatives were not based on flawed ideas but on an inability to ensure consistent implementation. The literature frequently reports strategy implementation failure rates ranging from 50% to 90%, although these estimates are debated and vary across pieces of research.
This metric doesn’t reflect intellect or diligence; it reflects a breakdown in alignment and clarity.
Often, leaders see the strategy as transparent, while employees, and particularly middle managers, experience it as ambiguous or fragmented. This disconnect, a wide chasm between top-level confidence and the reality below, renders the strategy powerless. Instead of directing action, it becomes abstract material in presentation slides.
B) Another factor leading to failure is prioritization: where strategy is unclear, every initiative appears vital. Where all initiatives are vital, no single effort receives the attention it deserves.
It is middle managers who, day in and day out, must navigate this contradiction; they are the individuals making real-time choices about where effort and resources will be directed. They don’t merely execute strategy, but adapt and interpret it.
Indeed, alignment matters far more than planning. No strategy, however ingenious, can survive long-term failure to align the organization. Strategy fails not because of popular opposition, but because of differential experience with it across different parts of an organization.
The Reality of the Middle Manager’s Role: Pressure, Ambiguity, and Overload
It’s a lot more comfortable to use words like “bridge” to describe middle managers than to be comfortable with what this feels like.
Middle managers operate in two directions at once:
They are recipients of directives on strategy, mandates for transformation, and performance targets.
They are also simultaneously dealing with team members’ issues, capacity constraints, execution realities, and their own team’s morale.
That combination creates a structural tension that is difficult to resolve.
A primary factor in this challenge is role ambiguity. How much autonomy middle managers actually possess often becomes unclear.
Are they strictly implementation-focused, or is the implementation adaptable to the reality of the work? How accountable should middle managers be for things beyond their direct control?
Lack of clarity about how much discretion they have inevitably leads to overload. Without clear boundaries, it becomes impossible for middle managers to distinguish between urgent and important, leading to more reactive rather than strategic prioritization of activities.
The capability gap is another widely overlooked issue. Moving from operational leader to translator of strategy requires a fundamentally different skill set. This mental shift is rarely formally part of a middle manager’s promotion and development plan. Middle managers are frequently promoted based on their ability to execute and are expected to become capable strategic communicators and leaders of change immediately.
The result is the expected: stress, fatigue, strain, burnout, and disengagement.
It does not just affect individual middle managers. Lower productivity, scattered priorities, increased staff turnover, and a weaker alignment between middle management and the overall strategy are all byproducts of middle manager overload within an organization.
In other words, the pressure on the middle layer is a systemic challenge, not just for individual managers.
Making Strategy Work: Enabling Middle Managers
Given the importance of the middle manager layer, the question arises: why do organizations underinvest in it?
In most cases, the answer is a combination of inertia and an overemphasis on strategy design, with a laissez-faire approach to execution, assuming it will happen automatically.
However, nothing could be further from the truth.
The most effective method to improve strategy execution isn’t more strategy – it’s stronger enablement for those who translate it into reality.
1) The first crucial step is clarity of role and expectations.
Managers need to understand precisely what will be asked of them, which decisions they own, which must be escalated, and what successful execution looks like in practical terms.
Uncertainty and ambiguity lead to either constant over-escalation or boundary overstepping.
2) Second, capabilities must be developed.
Strategic execution requires much more than the ability to complete tasks. It relies on strong coaching and change management skills, so investment in development in these areas cannot remain just a nice-to-have option if consistent execution is the objective. It is mandatory, if one cares for the success of their business, that is.
3) Third, leadership alignment is critical.
If, on the one hand, middle managers are viewed as merely messengers, they cannot provide valuable feedback to those who designed the strategy, and their engagement in the process will be low.
If, on the other hand, they are valued for the insights they can provide on the ground, they will provide valuable input to the strategic planning process.
4) Fourth, the organization needs feedback loops that work in both directions.
Managers need to effectively communicate execution challenges upwards, while leadership needs to clearly articulate the strategic rationale downwards.
Without an effective two-way feedback structure, a series of distortions emerges, leading each successive level to hear a modified version of the intended strategy.
5) Finally, rewards are important.
Organizations signal to their employees what is valued by reinforcing both operational execution and transformation. Recognition for change leadership rather than just task completion ensures that the challenging work of strategy implementation is integrated into everyday performance.
With these conditions, middle managers transform from overburdened intermediaries into powerful drivers of organizational direction.
Final Thoughts
When reviewing the research and evidence, one theme consistently emerges: the middle management layer is not an auxiliary level in the organization but rather the engine through which strategy actually takes effect.
Middle managers take high-level direction and transform it into tangible actions, process ambiguity into decisions, resist resistance, and disseminate understanding throughout the organization through relationships rather than purely by authority.
Strategy becomes stuck when this layer is not supported. When enabled properly and with a clear understanding, strategy advances with great celerity.
Most successful organizations prioritize investing in the enablement of their middle managers-the people who bring their strategy to life every day-rather than focusing solely on better strategic design.
This is because, in the final analysis, at the end of it all, strategy failure does not occur in the boardroom but in the middle.
Bridging the gap between strategy and execution requires more than intent—it requires the right frameworks and capabilities. Enroll in the Certified Strategy and Business Planning Professional and Practitioner program by The KPI Institute to learn how to align strategy, planning, and performance for meaningful organizational results.
