When I wrote my graduate thesis in the 1990s, I experienced what performance management was originally designed to be: rigorous evaluation focused on growth and excellence. My professor challenged my thinking, pushed me to examine different viewpoints, and helped me produce better work. That experience became my reference point for understanding both the promise and evolution of workplace performance management.
Nearly 30 years later, I thought it was time to revisit performance management through the lens of history, with a look toward the future. Thanks to Matthew Meadows and the team at WorkStory for supporting this project. I hope you enjoy reading it as much as I enjoyed writing it!
As I like to start everything future-focused, let's begin by learning where we've been. Then we'll explore where we are and where we're going in parts two and three of this series.
Performance management as we know it began during the Industrial Revolution, when work shifted from agricultural and craft-based activities to factory production. Frederick Winslow Taylor's "Scientific Management" principles in the early 1900s introduced the idea that work could be studied, measured, and optimized.
Taylor's approach made sense for the time: repetitive, standardized tasks where efficiency and consistency were everything. Workers were evaluated on how well they followed prescribed methods and met production quotas. The focus was completely on output, and "performance" meant sticking to established processes.
This industrial mindset became deeply embedded in American business. Even as work evolved, the original assumption remained: performance could be measured objectively, standardized across roles, and improved through systematic evaluation.
As organizations grew more complex, so did approaches to managing people. The human relations movement, sparked by studies at Western Electric's Hawthorne plant in the 1920s and 1930s, revealed that social factors significantly impacted productivity.
This led to the first formal performance appraisal systems in the 1940s and 1950s. Companies like General Electric pioneered structured approaches to evaluating managers and office employees, not just factory workers. The focus expanded beyond task completion to include leadership behaviors, decision-making quality, and potential for advancement.
World War II accelerated these developments. Military organizations developed sophisticated officer evaluation systems that were later adapted for civilian use. The idea of annual reviews, standardized rating scales, and documented feedback became standard practice in large organizations.
The 1960s brought significant changes to workplace management. Civil rights legislation made documentation of employment decisions legally critical. Performance appraisals evolved from development tools into legal protection mechanisms.
Sound familiar? You may be in one of the many organizations today that still view performance this way.
During this era, companies developed elaborate rating systems, forced distribution curves (like stack ranking approaches), and detailed documentation requirements. The goal shifted from helping people grow to creating defensible records of employment decisions.
Psychological testing and competency models became popular in the 1970s and 1980s. Organizations tried to make performance evaluation more "scientific" by identifying specific behaviors and traits associated with success. This led to increasingly complex review forms and multi-dimensional rating systems.
Companies like IBM, General Electric, and McKinsey became leaders in sophisticated performance management approaches. Their systems were widely studied and copied, establishing many practices that persisted for decades. And for some, through today!
The introduction of personal computers began changing how performance reviews were conducted. Instead of handwritten forms, managers used word processors and eventually early database systems to track employee performance.
This digitization made performance management more consistent and easier to store, but it also made the systems more rigid. Software constraints meant that evaluation categories, rating scales, and processes became more standardized across organizations.
HR systems started appearing during this period, centralizing employee data and making performance tracking more systematic. While these systems improved administrative efficiency, they also reinforced the view of performance management as a data collection exercise rather than a development conversation.
This was the world I stepped into in the mid-1990s, armed with my graduate research about what performance management could be, ready to see how it actually worked.
When I started working for a Fortune 50 company in the mid-1990s, I encountered the mature version of this evolution. The performance review system had been refined over decades to serve legal and administrative needs.
One of those needs? Ranking people with numbers and ensuring they remained "professional" at all times.
I remember so clearly sitting with my boss Warren, him delivering the feedback that I was marked low on "professionalism."
Why?
My skirts were not regulation length. They were too short. And here I was, maybe 23 years old, thinking I was so "professional" wearing cute skirts from The Limited or The Weathervane and wherever I shopped at the time.
The "unprofessional" feedback I received about my appearance wasn't an aberration. It was the logical result of systems designed to document compliance with organizational norms rather than develop individual potential. The elaborate forms, numerical ratings, and formal processes all made perfect sense within the historical context of performance management's evolution.
I don’t think that the system was intentionally harmful, but it had evolved far from its original developmental purpose. The scientific management principles that made sense for factory work had been applied to all work without adaptation for different contexts.
Looking back, though, that era did establish some principles worth keeping. Structure matters—random, inconsistent feedback is less helpful than systematic approaches to evaluation and development, though those approaches have evolved dramatically over time. (Much more on that later!)
Documentation serves important purposes too. While it became overemphasized, the ability to track performance patterns and decisions has value for both individuals and organizations. And when you're using evaluation criteria, standardization enables fairness. When everyone is evaluated using similar criteria and processes, it reduces bias and creates more equitable treatment.
Perhaps most importantly, the idea that organizations should actively help people grow was a significant advancement from purely transactional employment relationships. Professional development requires intentional support.
The challenge, as I learned during my early career, was that these principles had been implemented in ways that served organizational risk management more than individual development. The foundation was solid, but it needed to evolve.
By the mid- to late-1990s, cracks in traditional performance management were becoming visible. Knowledge work was increasing, organizational hierarchies were flattening, and employees were becoming more mobile between companies. The industrial-era assumptions underlying performance management were increasingly misaligned with how work actually happened.
This created the conditions for the next phase of evolution: the technology-enabled transformation of the late 1990s and early 2000s, when organizations would begin experimenting with new approaches to supporting employee performance and development.
The bottom line: Performance management's foundation years established important principles around systematic evaluation and development, but the implementation evolved to serve administrative needs more than human potential. Understanding this history helps us build on the solid foundations while adapting for modern work environments.
