Have you ever crushed your goals, pushed past every obstacle, and still walked away from a performance review feeling unseen?
You’re not alone.
In many companies, ratings and bonuses are tied so tightly to numbers that there’s no space for managers to use their judgment. That’s a big problem. Real performance isn’t just a number,it’s a story. And without room for discretionary movement, that story gets lost.
Here’s why smart organizations are building flexibility into their review systems and how you can too.
What is Discretionary Movement?
Discretionary movement is the ability for managers to adjust performance ratings or bonuses up or down based on real-world context, not just cold, hard numbers.It’s like adding a human touch to an otherwise robotic system.
Instead of relying 100% on strict metrics, managers can say, “Hey, this person faced huge challenges and still delivered incredible work. Let’s recognize that.” Or, “This person hit their numbers, sure, but didn’t show up as a team player. Let’s adjust.” Without discretionary movement, performance reviews feel like a machines. You input numbers get a score, and that is the end of the story.
But with it, you acknowledge what’s real: work is messy, people are complex, and numbers don’t tell the whole truth.
Learn how to design smart discretionary movement in performance reviews
Why Discretionary Movement Matters
Metrics are helpful. But they’re not everything. Imagine judging a sprinter’s race without knowing there was a brutal headwind. Numbers tell you what happened. Discretion tells you why.
Discretionary movement lets managers:
- Recognize exceptional efforts that metrics miss.
- Adjust for challenges like market conditions or team dynamics.
- Reward behaviors that align with company values but aren’t easily measured.
Without it? Performance reviews feel rigid, unfair, and demotivating. And disengaged employees don’t stick around for long. On the contrary, a smart, fair adjustment today can turn an almost-resignation into a re-energized top performer.
The most basic problem is that performance appraisals often don’t accurately assess performance.
The Pitfall of Tying Ratings and Bonuses Too Tightly
When you lock bonuses to strict metrics, you get:
- Zero flexibility.
- Employees chasing numbers instead of real goals.
- A workforce that feels undervalued when life throws curveballs.
If your best employees are more focused on gaming the system than growing in their roles, your review system is working against you.
Best Practices for Smart Discretionary Movement
If you give managers the power to tweak ratings and bonuses, you better do it right. Otherwise, what feels like flexibility can quickly turn into confusion or, worse, unfairness. Here’s how to keep it smart and structured:
1. Define Clear Guidelines
Freedom is awesome. Chaos? Not so much. That’s why the first step is to set crystal-clear rules about when discretionary movement is allowed. Think of examples like:
Exceptional contributions that blow the roof off expectations.
Serious external challenges that derail standard targets.
Behaviors that scream “culture champion” the ones you want everyone to notice and replicate.
And don’t leave it wide open. Limit the movement to something like plus or minus 10%. It’s enough flexibility to be fair but tight enough to keep everyone consistent.
2. Separate Ratings from Bonuses
Ideally, ratings and bonuses should not be tied at the hip. Start by rating performance based purely on work and behaviors. Then, calculate the bonus based on objective metrics. Only after that should managers apply discretionary adjustments if the situation calls for it.
When you separate them, you get the best of both worlds: structure and humanity. And your people feel it.
3. Empower Managers (the Right Way)
Managers aren’t just box-checkers; they’re the front line of fairness. But they need the right tools. That means training them to use discretion wisely and coaching them to explain adjustments clearly and confidently.
At the end of the day, employees shouldn’t be left scratching their heads thinking, “Why did I get this rating?” They should know and feel respected in the process.
Managers aren’t just box-checkers they’re the frontline of fairness. Give them the tools: train them for smart discretion and coach them to communicate clearly and confidently. Tweet
4. Moderate and Calibrate
Just because you trust managers doesn’t mean you leave them to freestyle. Calibration sessions are your safety net. Managers should come together to discuss and justify discretionary changes.
Even better? Bring HR or a cross-functional review panel into the mix.
Why? Consistency isn’t just nice. It’s everything. Without it, the whole system cracks under pressure.
5. Bring in Qualitative Factors
Not everything that matters can be measured. (And not everything that can be measured matters.) That’s why you need to go beyond the numbers. Include things like leadership, innovation, and collaboration in performance reviews. Use 360-degree feedback and pull insights from peers, subordinates, and cross-team partners. The more perspectives you have, the harder it is to miss the real story.
6. Communicate Like Crazy
Even the best-designed system will fail if no one understands it. Take the time to explain how discretionary movement works and why it’s critical. When employees see that managers are expected not just allowed to adjust based on reality, they’re more likely to trust the outcomes. Transparency builds trust. And trust builds engagement.
Manager vs. Committee: Who Should Judge?
Here’s a trick question: it’s not one or the other, it’s both. Managers have the context. They see the daily wins, the hidden struggles, and the real effort behind the numbers. Committees bring balance. They add broader perspectives and help keep biases in check.
The most innovative companies use a hybrid approach:
- Direct managers assess most employees.
- Committees review senior managers and high performers.
This way, you get the personal touch and the checks and balances you need to keep the system fair and credible.
How Gen AI is Changing the Game
Today, more managers and employees are using generative AI to:
- Draft clear, measurable goals.
- Aggregate performance data from different systems.
- Build stronger, faster reviews.
Goodbye, data-hunting headaches. Hello, smarter, more insightful bias-free evaluations.
Looking Forward: Growth vs. Grades
One final question: Are your reviews about looking backward or building what’s next?
Backward-looking systems focus only on what got done. Forward-looking systems set the foundation for growth, learning, and future wins.
You already know which one motivates employees more.
Bottom Line
Flexibility isn’t a loophole. It’s a leadership tool. When you build discretion into your performance reviews, you create a fairer, smarter, and more human system. And when employees feel seen and valued, they’re more likely to stick around, grow, and crush even bigger goals next year.
Ready to make your performance reviews smarter and more human? Start defining your discretionary movement rules today. Or better yet, train your managers to lead with context and fairness. Your future workforce will thank you.