Rant on Performance Management Systems

One of my favorite parts of being retired is that I’m no longer part of a performance review system. I wasn’t especially frustrated by these systems early in my career, but I was in the latter part—not because of their impact on me personally, but because of the impact I saw on people and, more importantly, on the companies themselves. This time of year, as goals are set and review cycles begin, a few recent conversations resurfaced that frustration.

Performance management systems are meant to bring out the best in people. In practice, they often do the opposite. Organizations tend to get exactly what they incentivize. What matters most isn’t what leaders say they value, but what the reward and punishment mechanisms reinforce—both in system design and execution.

I’ll ground this in my experience at Meta, where I spent roughly a decade. Meta acquired Oculus in 2014 for ~$2B. Nearly 12 years later, Reality Labs generates about $0.5B in quarterly revenue while losing ~$5B per quarter—minimal impact relative to expense. Over that time, the organization grew to well over 10,000 people, with what I observed as a high rate of promotion into very senior roles, accompanied by increasing organizational and communication complexity.

I also saw a shift in how work was communicated and decisions were made. Earlier on, communication was rough but substantive, focused on making good decisions. Later, it became increasingly polished and persuasive—more about selling than informing. I often left impressive presentations unsure what concrete outcomes had advanced. Communication and influence matter, but they became disproportionately rewarded relative to sustained, measurable results.

I don’t think this is accidental. When performance systems reward narrative strength, visibility, and perceived results more than durable outcomes, people optimize for those signals. Over time, even capable individuals hedge—shaping work around how it will be evaluated rather than its real impact. At scale, perception starts to matter more than results.

I’m not an expert in performance management design, but when these dynamics persist, they reflect a leadership issue. Leaders define what substance looks like and what gets rewarded. Advancement—especially at senior levels—should be tied to a sustained record of real impact, not just potential or presentation.

I’m sharing this not as a prescription, but because I believe the issue is real and widespread. I reference Meta because it’s where I have the most direct experience—but I doubt it’s unique.