First they came for the office perks. Next they came for remote flexibility. Now Fortune 500 CEOs are exerting their upper hand by issuing employees new ultimatums: Show us your results—or else.
In early January, in the wake of massive layoffs, Amazon CEO Andy Jassy asked corporate workers to submit three to five accomplishments that “show the impact of your work,” as part of a revamped performance review system that helps determine future pay. It’s reportedly a departure from previous review processes that posed softball questions about employees’ strengths and interests and included prompts such as, “When you’re at your best, how do you contribute?”
Meta CEO Mark Zuckerberg is putting more emphasis on rewarding outstanding performers too as part of a tightened review system that’s intended to slot employees into bonus bands and provide “more frequent feedback and recognition in a more efficient way,” a spokesperson told Fortune.
And finally, Citi CEO Jane Fraser warned employees that they are “not graded on effort” but “judged on our results” and urged them to adopt a more commercial mindset as the bank cut about 1,000 positions.
To be sure, corporate America does not run on goodwill and how hard workers try. Employers have always expected their workers to produce results. But as AI floods the workplace with productivity metrics, the strongly-worded memos signal a reset that fully strips out the touchy-feely, more accommodating management style of the COVID era to focus on requiring workers to get stuff done.
The no-nonsense approach reflects the pressure CEOs are under to grow their bottom line in a period when a series of X-factors—geopolitics, AI, evolving markets, and an unpredictable White House—can disrupt even the best-laid plans. Essentially, CEOs are passing the pressure and uncertainty that they’re feeling along to employees further down the corporate ladder.
The new approach to performance assessment isn’t all stick—there are carrots too. Companies are using a powerful motivator to drive tangible results: money. “With all those trends as a backdrop, the folks at Meta and Amazon and Citi are kind of reading the world,” says Michael Useem, professor emeritus of management at Wharton. “They’re concerned about ensuring that senior- and middle-level people perform, and are returning to compensation or evaluation, and then the resulting bonus, as an instrument to more effectively do so.”
In the past, CEOs have pressed two other levers to motivate their employees, says Useem: purpose and so-called enriched work, in which employees can see the product of their labor. But those squishier methods might be better suited for an era when the power dynamic isn’t tilted so heavily in bosses’ favor.
U.S. unemployment is still low, but it inched upwards last year to end at 4.4% in December, and workers are reportedly “job-hugging” and more worried than they used to be about finding a new job if they get the ax. Workers’ confidence that they’ll be able to find a new job dropped to 44.9% in September, according to polling by the Federal Reserve Bank of New York, the lowest level since the survey began in 2013.
The elephant in the room, of course, is AI. The worry that artificial intelligence and automation could soon displace large swaths of the workforce—estimates vary from 6% by Goldman Sachs to the eye-popping 50% of white collar entry level jobs floated by Anthropic co-CEO Dario Amodei—is eating at employees. And this concern gives employers another point of leverage. One reason CEOs are citing AI in announcing jobs cuts is to motivate remaining employees to adopt the technology, Fortune reported earlier this month.
The employees on the receiving end of this intensive focus on results have good reason to worry. Amazon, Meta, and Citi have all laid off thousands of employees in the past year, with more cuts expected. Amazon and Meta, for their part, are slashing their white collar payrolls as they fund massive AI infrastructure projects. At Citi, Fraser is in the midst of a lengthy turnaround effort that will trim 20,000 jobs from the bank by the end of this year.
In issuing their memos and refocusing performance reviews on results, the CEOs may be triggering employees’ anxiety. “Incentive-based motivation is effective,” says Useem—but so is fear. “It’s one of the strongest human emotions. When you’re afraid of losing a bonus or losing your job, it gets your attention,” says Dan Cable, professor of organizational behavior at London Business School. And it can concentrate worker efforts on a singular goal, Cable says: “‘If you want that number, I will reliably get you that number.’”
But creating a climate of fear can backfire, says Cable. Here’s what fear doesn’t do: It doesn’t foster creativity or innovation. “When we’re afraid,” Cable says, citing research, “we’re not taking customers’ perspective, we’re not thinking about new ways to do old things. We’re not sharing information with colleagues.”
It’s easy to see why CEOs favor the results-only approach, at least in the short term: “It’s so clean,” says Cable.
But in a messy world, with all those unpredictable X-factors, leaders would do better to foster ingenuity, grit, and perseverance. That means caring not just about outcomes, but how employees managed uncertainty to get there, and what they might have tried—and failed at—along the way.
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