Why Meta's performance review process could be a warning for leaders

Performance reviews are vital to keeping productivity metrics and expectations on track. But while nearly all managers agree there's room for improvement, it will take intentional change to address bias in the process. 

Ninety-five percent of managers are dissatisfied with their company's performance review system, according to a survey from Gallup, and only 5% are satisfied with the outcome of their annual reviews. What's more is that less than 20% of employees feel inspired to improve their performance after a review, with only 21% feeling like those metrics are within their control. Employees' performances are not the problem — the system used to evaluate them is.

"The reality is that manager ratings are woefully inaccurate," says David Murray, CEO and cofounder of employee management platform Confirm. "The majority of a manager's review is based on their idiosyncrasies as a rater: Are they an easy or hard rater? Do they have biases? We're making life changing, critical decisions about people's professional lives, and unfortunately they're not based on [performance alone]." 

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In some cases, those idiosyncrasies can lead to bias, and even layoffs. At Meta, for example, an internal memo ordered managers to rank more employees in its "below expectations" tier, the lowest performance bucket, during their midyear performance reviews. Although Meta did not disclose the reason behind their ordinance, skewing employee ratings and ensuring there will be a certain number of employees "underperforming" could make it easier to make staff cuts in the future. Meta's directive came only months after the company laid off nearly 4,000 employees it had labeled low performers. 

This can be disastrous for employees who are more introverted, or those who are neurodivergent and have more difficulty advocating their successes, Murray says. While it's not clear how Meta ranked those who were eventually laid off, it's critical employers rely on data to guide their decisions, rather than instinct or emotion. 

"Most organizations have a performance management system where they're recording all of this data, but CEOs at these larger organizations aren't using those platforms because they don't trust them," Murray says. "Instead, they're going to their lieutenants and asking them who to keep and who to cut. But it's so critically important to have a methodology that identifies who those people are."

Establishing a new system

To build out an effective methodology, leaders should utilize the organizational network analysis method (ONA), Murray says, which measures interactions between employees and their managers at a more comprehensive level than traditional reviews. This system, which works in conjunction with existing performance management systems, is done by having managers take an additional step to substantiate their decisions with specific experiences and real-life examples of an employee's performance. The goal is to keep track of how the review process is being measured and whether it accurately depicts how collaborative an employee is. 

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"Have managers answer questions like: Who do you go to for help and advice, and about what? Who energizes you at work and why? Who do you believe is outstanding? Who needs additional support or attention and why?" Murray says. "[That can] prevent a popularity contest." 

A better performance review system creates a safer, more productive environment for employees, keeping them engaged and optimistic about their future. Ensuring that the right metrics are in place company-wide can also pay off for businesses, too. 

"When you don't lift up those outstanding contributors, that adds up to dollars and cents," Murray says. "Companies like Meta are losing billions and it's because the wrong people are leaving and the wrong people are staying."