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.
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.
