Review of employee performance or enquiry about it is necessary. It is important from the business process perspective.
However usually some critical items are missing from the picture:
a) Clear metrics of performance;
b) Communicating to the employees what is their career path or responsibility-compensation evolution;
c) Information about necessary skills or competencies the employee is missing to reach potential role within organisation.
At my first ever interview with a huge multinational software company in 2001 when I just finished university as a Software Engineer, one of the questions I still remember was "How many lines of code have you ever written?" I didn't know exactly and estimated it as approximately 10,000. The interview was unsuccessful, but I presume not only because of that reason. If I had this question at an interview again I'd reply to an interviewer with a proposal like "Would you also like to know how many lines of code I deleted?" It shows clearly that in this particular area, measuring programmer’s performance by the amount of lines of code produced is a bit weird. How does it help if all those billions of code lines don’t deliver what customer or end user would like to use?
Consider another example, not from IT development industry. Imagine a bank or insurance company where people in customer service unit are expected to serve customers sitting in the brick and mortar branch of organisation, but their performance is evaluated by quantity of leads that they personally can’t influence. What sort of team spirit it would foster? How would it make a worker fill and be more productive and useful at work? How does it benefit the business?
Following scenario may also look familiar to many. Imagine you are a manager at some company and are having a conversation with your direct report about her performance and when she asks about her next level or promotion or a different role you say something like "You must have some extra skills for that". The reasonable question from her then would be "Would it be possible to define the necessary skills?" But for this question you might not have an answer or the answer is smoke and mirrors.
Apparently something is missing here in the business process or company culture:
1) Obvious career and remuneration paths that are in fact implemented by and for all in the organisation;
2) Clearly defined responsibility for being incompetent at all levels, which is also related to metrics applicable to managers;
3) In organisations there is a tendency to make decisions as a collaborative process and not just by one person.
In regards to the employee career progressing and remuneration it is different for some reason and usually only the direct manager’s decision which is very often quite subjective. All the above is no problem as soon as it doesn't affect either workers or business.
However if we move towards society that values work-life balance, workplace that is sustainable and makes people work more for the benefit of the company and environment, the leaders of today have set up those important pillars of success.
For those who are not on leadership positions yet the key idea is to start measuring your performance and managing your career path yourself.