I’m a huge fan of formal performance reviews. In my 10 years leading technology companies, I’ve come to see these exercises as invaluable. When done right, they can change careers, take working relationships to the next level, and increase employees’ happiness and sense of purpose. They can engender empathy between employer and employee.
In an ideal world, employees would receive constant feedback on their performance and would, at any point in time, know what they do well, how they can leverage their strengths, and what they need to improve. Managers would regularly meet with their direct reports to discuss how to support and adapt targets and projects to each employee’s ability and aspirations, professional and personal. The HR department would use reviews as a way to identify career opportunities, training needs, and unique skills waiting to be applied to existing and future business challenges.
Unfortunately, this is almost never the case. Everybody gets busy. Most managers dread and even avoid delivering criticism, no matter how constructive and useful it can be. Performance targets and expectations are not always clarified—and when they are, they are soon outdated, especially in fast-growing businesses like tech startups. Most one-on-one conversations tend to be focused on what the employee can do for the company (i.e., on his/her/their deliverables) and barely address what the company can do for the employee and how confident the employee is feeling.
And so, in countless organizations, annual, semi-annual, or sometimes quarterly performance reviews end up serving as the much-needed forcing mechanism to deliver this kind of feedback, albeit in a preformatted, somewhat cumbersome way. Often performance reviews are a manager’s only opportunity to consciously spend time thinking about the future of a collaborator in the business. Reviews are also extremely useful in creating a scalable and more transparent system for decisions around compensation and promotion, especially in companies with several hundreds, if not thousands, of employees. And the public nature of the process—to some extent—protects employees against discrimination.
So, as I wrote: While I understand the imperfections of formal performance reviews, I’m a big fan.
As an industry almost entirely dependent on its ability to recruit and retain the best talent, tech has been at the forefront of many innovations in talent management. Companies like Netflix, Google, and Facebook have implemented a large number of initiatives, including constant feedback, the “Keeper Test” (where a manager is asked, “Would you fight to keep that employee?”), the separation of performance review and salary discussions, and peer reviews. [pullquote class=”” cite=””]The true challenge is how the tech industry can become more accommodating to challenges beyond the workplace while still preserving the growth mindset that has fueled so much of its success.[/pullquote]
Most tech employees are now five months into their work-from-home experiment—and many of them are likely to continue working remotely for the foreseeable future. Amazon extended its work-from-home policy until the end of the year; Google until the summer 2021. Twitter, Facebook, and Slack have announced that some employees can work from home permanently. As a result, the industry’s proven capacity to rethink traditional HR processes—and the performance review, in particular—is going to be critical.
Employees, especially ones with children or eldercare responsibilities, have already started to express their anxiety about upcoming assessments and are requesting the ability to opt-out. For many, juggling work and family has had a measurable impact on their ability to focus, the realistic hours they can dedicate to tasks, and hence their performance. In response, companies will have to become more empathetic toward their employees and to think about them more holistically.
We used to separate professional life from personal life. It was actually considered poor form to bring personal concerns into the workplace. Problems with elderly parents? You were supposed to power through. Bad divorce? It’s been two months already. Time to move on! Childcare issues? You have to find a way to solve that problem ASAP. Already artificial, this separation has been made completely impossible by COVID-19.
The true challenge is how the tech industry can become more accommodating to challenges beyond the workplace while still preserving the growth mindset that has fueled so much of its success. Can it continue to implement—properly and in a de-biased way—its meritocratic ideals while acknowledging the full scope of employees’ lives? It’s time for many management teams to ask themselves questions that they have largely avoided until now:
- What is the role of performance reviews? More often than not, they are used strictly as a rating to determine an employee’s pay rise, promotion, or exit. Landing in the bottom 10% to 20% is a pretty direct path to being terminated. Can performance reviews instead serve as detection tools to identify employees who need help or are being poorly deployed? Can they be used to redeploy talent, rather than simply weed it out?
- How can we value performance beyond KPIs and results? Historically most performance reviews are structured around number-based targets. They rarely take into account behavior and other “soft” contributions. The pandemic has made it challenging to meet traditional targets, not just because of the economy: There are also parenting responsibilities and the sheer mental impact of being locked down at home. Certain skills have become even more critical: communication, the ability to bring clarity to complex moving situations, decision-making under stress, and the remote management of people. Can we create an evaluation system that accounts for the importance of these COVID-19-era skills?
- And finally: How can managers be more focused on developing people rather than managing tasks and deliverables? Can compassionate leadership that supports social capital by creating a more empathetic performance review process actually help companies adapt to the pandemic? Do we have an unprecedented opportunity to accelerate the reinvention of businesses, starting with the review process?
This life-shattering crisis is an opportunity to completely rethink how we work, where we work, and how companies that no longer rely on brute force (e.g., manufacturing moving to automation) can make human talent their most valuable asset.
Reimagining what works looks like is going to be difficult. We’ll need to understand, in a scientific, data-based way, what actually drives people. (One resource: the research outlined by Lindsay and Neel Doshi in their book, Primed to Perform: How To Build the Highest Performing Cultures Through the Science of Total Motivation.) Just as we apply design thinking to the customer experience, we’ll need to redesign corporate systems around employees and consider how to bring out their best and most creative sides. These challenges are immense, but I have no doubt that the companies that embrace them, truly lean into them, and have the head start on the platforms and software will win. Ultimately people are—and always will be—what makes a company successful.
Maelle Gavet has worked in technology for 15 years. She served as CEO of Ozon, an executive vice president at Priceline Group, and chief operating officer of Compass. She is the author of a forthcoming book, Trampled by Unicorns: Big Tech’s Empathy Problem and How To Fix It.