The Leadership Capital Index

CHAPTER 10Performance Accountability Processes

Investors Want Organizations That Reinforce Desirable Performance and Behavior

“We’ve done away with performance appraisal,” a senior leader recently told me, “because it causes so many problems.” She explained that instead of performance appraisal, her firm trained managers to help employees set goals, then to have conversations with those employees about their goals to make sure they were on target. In a somewhat similar situation, a business school recently decided to avoid grades and the tension they created, going instead to a high pass, pass, and low pass system.

Despite the problems with formal appraisals that have led these leaders (and many others) to attempt to abandon them, it is still ...