Most companies like to think they know who creates value. They distribute rewards and recognition based on what executives believe will lead to success. But there's a major flaw in this approach: leaders are often the furthest removed from the actual work being done, and the value being produced.
The inner workings of any company are complex, and information tends to get filtered and distorted as it climbs the chain of command. The details, where the real value is created, often never make it to the boardroom. Yet these same executives are tasked with making decisions about employee value using this same incomplete and inaccurate data.
In this information flow, every perspective counts, but not all perspectives are equally informed. A true meritocracy demands a smarter, market-based approach to evaluating contribution—one that takes into account real expertise, direct observation, and accountability.
Traditional workplace hierarchies suffer from a critical flaw: information asymmetry. In this structure, senior executives make decisions about employee performance and value without having direct exposure to the day-to-day execution of work.
Think about your own organization. How well does a CEO understand the technical intricacies that make a software engineer productive? How much does a VP know about the nuanced challenges of customer service interactions? Often, the answer is "not much."
This disconnect results in what researchers call "stratified micro-societies." Executives focus on budgets, strategy, and quarterly reports, while frontline employees tackle real problems and implement practical solutions. Between these layers, critical information is lost, skewed, or never communicated.
The result? An incentive structure that often rewards the wrong behaviors, like office politics or superficial metrics, while neglecting true value creation. When leaders lack an accurate understanding of what drives success, the rewards they distribute frequently fail to align with the behaviors and contributions that actually make a difference.
Many companies try to address these issues through programs like 360-degree feedback, which aim to gather input from multiple people. On paper, this sounds like a great way to involve diverse perspectives. In practice, it often creates more problems than it solves.
Here’s why:
Poor data quality: Feedback systems with no accountability to the informatio provider are prone to being gamed. Feedback can be biased based on limited observation windows or personal agendas, and there’s little accountability for providing honest, accurate insights.
No expertise weighting: In many systems, the opinion of someone who has worked closely with an individual for months is treated the same as someone who interacted with them briefly. This lack of differentiation dilutes the quality of the feedback.
Information overload: Without a mechanism to prioritize or weight feedback, it becomes difficult to interpret. Contradictory input leads to confusion rather than actionable insights, leaving managers overwhelmed and employees unclear about how to improve.
As a result, traditional performance reviews become a time-consuming, frustrating process for everyone involved, yielding little real value or clarity.
Stock markets offer a better way to aggregate perspectives. In a market, every trade matters—but not equally. Larger trades, backed by more capital and potentially deeper analysis, have a greater impact on price. If you've earned the right to manage more money, you've earned the right to have a bigger impact on the market.
For example, a pension fund that buys 100,000 shares influences the market more than a retail investor purchasing 10 shares. This isn’t unfair; it simply acknowledges that some participants are better equipped with information and resources.
This principle can be applied to workplace evaluation. Some people are better positioned to assess an employee’s contribution than others. A project manager who works with someone daily has more insight into their performance than an executive who only sees quarterly reports. The executive who has years of demonstrated track record has a better judgement than the intern.
Some companies experiment with flat hierarchies and democratic feedback systems, where every employee has an equal say in evaluations. These approaches have their benefits, like fostering engagement and ensuring diverse perspectives are heard. However, they also have significant drawbacks.
Pure democracy in performance evaluation can be organizationally expensive and unwieldy. It struggles to handle the complexity of performance issues and fails to account for differences in expertise. The reality is, equality of voice doesn’t equal fairness of evaluation. The person who worked closely with a colleague for weeks has a more informed perspective than someone who only attended a few meetings with them.
A more effective solution is a weighted feedback system that assigns influence based on relevant factors. These include:
This isn’t about reinforcing traditional hierarchies. It’s about improving information quality and ensuring accountability. A fluid, real-time system that accounts for all these variables, aggregates them, and provides a clear, actionable output is required for next generation companies.
Market-based weighting addresses the key flaws of traditional performance management systems:
By addressing these systemic issues, market-based evaluation transforms performance management from a frustrating chore into a powerful tool for building stronger teams, driving accountability, and fostering a culture of continuous improvement.
The INFIN revolutionizes performance evaluation by creating a real-time market for assessing team contributions. Think of it as a stock market for workplace value. Every individual provides input, and every perspective matters. However, credibility is assigned based on each evaluator’s relevance, expertise, and track record. The goal is to create a fair evaluation of performance, not an equal one.
The system dynamically adjusts weights for feedback, ensuring transparency and fairness. Over time, it produces a clear, accurate score for each employee that reflects peer-reviewed performance. It’s like the stock market for organizations: a system where merit, expertise, and accountability drive value decisions.
For market-based evaluation to succeed, careful implementation is essential:
Here’s the rub: even a smart system finds resistance. People cling to what’s familiar, especially if they’ve survived inside the old system. Change spooks folks who’ve learned to play by different rules. The real work isn’t just installing new software, it’s retraining mindsets.
Training matters. If people don’t know how to give or use feedback in the new framework, the system dies on the vine. You’ll need to run workshops that helps everyone understand how relevant feedback actually rewards everyone.
Look at companies like Gore and Morningstar. They didn’t just print new org charts. They trained people to have hard conversations, built tech for transparent peer review, and rewarded agility. The kicker: attrition dropped and top talent stuck around, because fairness stopped being a buzzword and started being a promise.
Every perspective matters in a successful organization, but not all perspectives carry the same weight. Treating all feedback equally creates noise that clouds decision-making. By assigning influence based on demonstrated expertise and accountability, companies can build fairer, more effective systems for recognizing value.
Market-based evaluation is about amplifying the most informed and most credible voices. When organizations shift from traditional hierarchies to systems that reward accuracy and contribution, they unlock stronger teams, better decisions, and a culture of true meritocracy.
Fairness isn’t about giving everyone the same influence—it’s about giving every voice the weight it has earned. With the right tools and systems in place, organizations can create workplaces that value merit, recognize real contributions, and thrive on collaboration.
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