The Negative Impact Labels Have on an Employee’s Performance

Managing data about employee performance is essential for businesses today. But is labeling some employees as low performers limiting their ability to succeed?

If the goal of labeling some employees as low performers is that they strive to become better performers, there’s little research that supports this strategy. In fact, studies demonstrate the exact opposite. The manager-employee relationship becomes contentious, and the relationship is likely to end poorly.

A Spiral of Low Expectations

One study by Ivey Business Journal found that managers form opinions of employees very early on that are difficult to shake. Frequently these opinions are not based on the employee’s actual work, but rather on their perception of the employee’s attitude.

“Once an employee is doubted,” they wrote, “those ambiguous situations are likely to be viewed in a negative way. In other words, bosses are going to see what they expect to see, remember what they want to remember, and interpret confusing events in ways that bear out their initial impressions.” They refer to this situation as “set-up-to-fail syndrome.”

A Self-Fulfilling Prophecy

The employee will begin to pick up on their manager’s low opinion of them. One way this typically manifests itself is through micromanaging. While managers just expect high performers to do good work, they scrutinize low performers’ work for flaws. When it’s time to dole out assignments, managers will give the low performers routine work. Managers even demonstrate their opinions of employees through body language and tone.

This has long-term ramifications for performance. Ryan Quinn wrote in Harvard Business Review, “Once people accept these categories as ‘truth,’ they often act as if these categories are true, and these actions influence performance.” This may happen because managers intentionally withhold resources from low-performing employees as they don’t want those resources to be wasted. It may also happen through the slow, steady undermining of an employee’s confidence.

When you label employees as “big-picture thinkers” or “detail-oriented,” the same principle applies. They may be capable of doing different work but begin to think of themselves as the categories they’ve been assigned to.

How to Avoid the “Set-up-to-Fail” Trap

Once you’ve established your opinion of an employee, it’s difficult to reverse. However, it’s not impossible. Think of when the employee has exceeded your expectations. What helped them succeed in those scenarios? Similarly, what conditions has the employee not worked well under?

If you can’t think of any ways that the employee has exceeded low expectations, then it’s time to have an honest conversation with them. However, in most cases, the company hired them for a specific reason. They were selected over other candidates for that position and are probably capable of excelling in the right circumstances.

Performance management is mission critical for companies looking to increase productivity. Managers should be evaluating performance and setting reasonable, specific goals. But managers who get the most out of their teams are careful about how they label employees.

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