Everyone loves high performers. However, individuals who consistently deliver exceptional work are rare and valuable.

One constant I observe when helping leaders build better teams is that the obsession with top performers can backfire. Focusing too much on top performers can lead to neglecting other team members who may have potential. This attitude not only creates a divide that ostracizes low performers but also blinds leaders who believe top performers are infallible.

Categorizing people by performance has its benefits. However, the performance bias can create more harm than good.

Managers fail to realize that top performers have problems of their own – they are anything but perfect. Additionally, research by Google shows that hiring the ‘best’ talent doesn’t guarantee team performance. Focusing on improving collective performance rather than individual performance is a more effective approach.

1. The halo effect:  why we see what we want

Categorizing employees can provide insight into individual performance, but applying a black-and-white approach can distort and exaggerate people’s abilities. Top performers are often idealized as superheroes, while low performers are unfairly demonized as villains.

The halo effect happens when managers have a hugely positive view of a particular employee. And see them as more extraordinary than they actually are and miss to acknowledge areas of improvement.

As human beings, we have a natural tendency to confirm our preconceived beliefs. The halo effect can also result in low performers being “punished” as their managers exaggerate their flaws.

Beliefs encourage us to take sides rather than to ‘see’ other possibilities.

The halo effect can damage objectivity when assessing people, affecting both management and peer-to-peer evaluations.

What you can do about it

The entire team should assess every team member, not just the manager. Including different perspectives can help eliminate bias.

Approach performance with a more realistic approach. Avoid idealizing top performers or being too critical of low performers. Understand what hinders performance — focus on the action rather than the current status.

2. Stigmatizing : labels put people in a box

Our behaviors are dynamic, not static. Even top-performing employees get stuck from time to time. However, labeling people as ‘top performers’ or ‘low performers’ creates the impression that employees belong to only one group or **the other. We end up putting people in a box from which they can’t escape.

Labels don’t just limit employees' but managers’ perceptions too.

Labeling people forces everyone to focus on the present reality rather than on the potential. Neuroscience shows that the words we use to describe others shape their image. That’s the problem with labeling: they limit people’s development by putting them in a box –  they become the label.

What you can do about it

Shift from a static to a dynamic approach  –  instead of labeling people, focus on what conditions can be modified to unleash people’s potential. Google and many other companies found that rotating ‘low performers’ into a different team drastically improved their behaviors and contributions.

Similarly, are you providing a safe space where people can bring their best selves to work? Many times, what managers see as low performers are people who are merely silencing their best ideas because they are afraid of being punished. Also, extrovert managers tend to ignore the power of quiet people — being quiet doesn’t mean not being smart, as I wrote here.

Remember that the world is not divided between low or high-performers. The majority of people fall in between, as shown below.

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3. Comparison : the danger of applying external standards

Rankings are useful for competitive sports but not for encouraging teamwork. When we force people to compare themselves with others instead of focusing on personal development, we hinder the latter.

Comparing ourselves to others is an unhealthy practice. There will always be people who are either better or worse than us.

Focusing solely on our weaknesses can be deceiving. It can lead to frustration or a false sense of comfort. Enron, for example, had a practice of grading their employees annually and firing the bottom 15 percent, regardless of their absolute performance. This “rank and yank” practice encourages politics and manipulation.

The ‘everyone against everyone’ practice didn’t work for Enron. The pressure to defeat internal competition forced a ‘whatever it takes’ mentality  –  their executives decided to hide losses through accounting tricks. We all know how that story ended.

What you can do about it

A competitive environment can be healthy, but viewing our colleagues as competitors is not. It’s important to balance healthy competition and a “winning at any cost” culture.

Internal motivation is more effective than using transactional rewards and punishments as motivators. Move beyond the carrot-and-stick approach.

As Daniel Pink explains, the motivation 3.0 approach is about autonomy, purpose, and mastery. Every person wants to be part of a mission bigger than themselves, to get better at what they do, and to have control over how they do their work.

Telling people how to do things doesn’t work — coach them to find their own solution. Comparisons make people focus on others rather than on what they must improve. Employees that behave autonomously become more accountable.

4. Mental inertia — the tricks our memory plays

The ability to recall an employee’s performance throughout the year is almost impossible. Most managers suffer from mental inertia — they remember the most recent events (especially if they are negative).

We are inclined to use our recent experience as the baseline for what will happen in the future.

The recency bias can affect our objectivity  and lead us to  make wrong financial or personal decisions. While this bias may work in our favor most of the time, it can be deceiving when dealing with people. Yes, human behavior is often unexpected and unpredictable.

Studies show that high-performers are more likely to quit when things get tough — those who are used to winning all the time or have very high expectations usually fail to overcome adversity.

The recency bias  –  focusing on recent or tiny negative incidents  – creates the perception that employees are being micromanaged –they feel their bosses can’t let go of details instead of focusing on the bigger picture.

What you can do about it

Many companies, such as Netflix, believe that honest and straightforward conversations regularly create better results than rating everyone on a five-point scale.

Turn ongoing feedback into a habit. Encourage your team to identify and solve their tensions on the go — it’s easier to fix problems at an early stage than when they’ve already become toxic. Also, performance improvement is too critical to address it just once a year. That’s why many companies are replacing annual performance reviews with ongoing feedback, as I wrote here.

5. Feeding envy : avoid dividing the team

Idealizing top performers doesn’t encourage others to improve their game. On the contrary, it positions them as threatening.

When we fall short, envy clouds our behaviors — we focus on undermining others rather than on raising our own bar.

Decades of research show that when we size ourselves relative to others who are better than us, we experience discomfort and fear. Envy, resentment toward others because of their possessions or success, divides teams.

According to a University of Minnesota study, peers will strategically lash out at star employees only when it is not in their best interest to support them. This can be even more frightening than expected.

What you can do about it

Addressing individual performance is important, but not at the expense of promoting internal competition. Reward collective behaviors and focus on improving overall performance.

Shift the attention from sizing oneself relative to others: how can everyone contribute to **making the team better?

Match high performers with low performers:  having an accountability partner within the team is more effective than being told by one’s manager what needs to be addressed. The accountability partnership invites people to commit to owning their path toward constant improvement, as I explain here.

Help people recognize the benefits of collaborating with high performers rather than seeing them as enemies.

The Power of Collective Performance

Organizations must focus on collective performance  by coaching team members to improve as one.

Self-awareness is a powerful tool for team building  – it’s about having an accurate view of one’s skills, abilities, and shortcomings. Team awareness is practicing it at a collective level. Research shows it increases decision-making, coordination, innovation, and conflict management.

A self-aware team can regulate how each individual plays. Overall team performance increases when everyone shares the same purpose and sees each other as partners rather than enemies.

Although it may seem counterintuitive, focusing on team performance can actually lead to improved individual productivity rather than the other way around.