How to Flop at Performance Evaluations aka the 80/20 Rule

I’m currently sitting on a plane watching Holiday Vacation in the background.  Clark Griswold is about to get jilted on his bonus check getting a ”jelly of the month” instead of a cash bonus. The holidays really are the absolute WORST time to do performance reviews. Is it even possible to take constructive feedback when there is a mother-in-law staying in the house?

80/20 People

At some point you’ve probably heard the 80/20 rule. That 20 percent of the people produce 80% of the output. This is a real thing. It’s as real as the nose on your face.  

Human performance nearly always trends toward an 80/20. This is called the Pareto Principle. If you are looking for the one take-away from this post its this:  Performance is NOT BELL CURVED SHAPED. It’s just not. It’s log-normal. Think of a bell curve with a right leg kicked way out. I am not kidding about this. Anything from lifetime baseball home runs to wealth, human performance nearly always goes log-normal. It looks like this:

Pareto is so pervasive in human performance, even if you take something like the top 500 lifetime home run hitters in the MLB they will distribute log-normally.  Oh, but it’s so much more pervasive than that. Take the top 20% of the 20%? Guess what? Yep they distribute log-normally. The only thing surprising is that we seem surprised by hyper-performers.

So, if you look across your team and, despite your best efforts, just don’t see a Pareto distribution of performance, something is off. And it’s probably you.

Reason One: You are using your hyper-performer as a standard

See that person hanging out on the tail of the distribution above. That’s ”the one.” The hyper-performer. When it comes to humans: Hyper-performers happen. You’ve met them periodically in your career. You’ve seen extreme outliers people like Jeff Bezos and Michael Jordan.  They perform at incredibly high levels with ease. It’s natural to say your hyper-performer is the benchmark. But this is just not realistic.  Your hyper-performer is just that.  A hyper-performer.

More likely than not you have tail worthy employees hiding out in the 80%.  They are there phoning it in with little effort. It’s a natural human instinct to seek safety and stability. Not standing out and entropy play a huge role here. But as a manager, I’ll cut to the chase scene and tell you flat out: If your objective as a manager is not focused on figuring out how to get people out on the tail, you are out of your freaking mind. One more person on the tail is a huge leap in overall production.

Reason 2: You are not evaluating on actual performance.

Good chance that if you still can’t see your employees Pareto-ing then you are using non-performance criteria. Daryl Morey, the GM of the Rockets refuses to meet with players.  In the movie Moneyball, Billy Bean refused to travel with the team. Why? In both cases they did not want to be persuaded by their players’ personality to cloud their judgement. Maybe an extreme example, but just recognize the fact that your performance evaluations can easily be swayed by how much you like a person.

Do whatever you can to get people on the tail.

Here are some of the things we have done to get people on the tail of performance.

We killed the regular work day. Work hours are a nonsense artifact of factory work and don’t apply to our business. We ask people to just focus on output. Whether you do that at midnight or noon does not matter.

We are more frequently using “strawmen” (staw-people?). Put forth a deliberately mediocre idea with the intent of mauling it. Stabbing it. Driving over it with an intellectual car. Sometimes killing a bad idea brings out the best work.

We killed the regular vacation and PTO. Treat people like adults and ask them to strike the balance in their lives. Check in frequently to ensure they are managing it well, but having them control of how various stressors are balanced does wonders for trust and engagement.

We focus on knowledge acquisition, synthesis and sharing. What you know is not really relevant. Why? Because unless you are living under a rock the “best” way only continues to be “best” for…what? A year? Six months? In this kind of environment what you know is only helpful insofar as it helps you acquire new information, synthesize it and share it. If you have people sinking in their heels on “that’s the way it’s always been done”… they are going to get steamrolled.

Happy New Year Everyone. Let’s Go!