Over the past few years, many organizations have moved from traditional employee management techniques to a performance management model. Instead of limiting performance discussions to annual reviews, the performance management approach provides meaningful, ongoing feedback throughout the year to make employee development a continuum.
A performance manager is the person who facilitates this process. In this role, he or she is responsible for developing goals and objectives that align employee performance to the company’s key performance indicators, developing the benchmarks for measuring results, and, often, determining how often to meet with and guide individual employees. In short, performance managers are both coach and teambuilder, charged with driving development and inspiring employees to perform at their highest level.
When done right, everybody wins. The employee grows as a professional, and the company achieves its business goals.
How someone becomes a performance manager
The role of performance manager requires a unique blend of skillsets, from data analysis and reporting and clear communication skills to exceptional coaching and management skills. Typically, the position requires, at minimum, a bachelor’s degree in business or management, with real world experience working in human resources, as a project manager, or as a performance optimization consultant, with proven proficiency using statistical analysis tools. If the performance manager is developing training materials, experience with curriculum design could be required, as well.
What some leading tech companies are doing today
Several companies have already implemented their own performance management strategies, with great success. As you can see by these examples, there’s not one “right” strategy. The key is finding the approach that aligns with your company, culture and goals.
1. Amazon’s White Paper Process
Employees who feel connected to their company and its purpose are often more motivated than those who perform their jobs in a vacuum. That’s why it’s so important to clearly communicate the company’s mission, values and vision to keep the workforce engaged, and moving toward those common goals.
Amazon has taken this concept one step further, implementing a white paper process to encourage employees to think creatively and be able to think through the business impact of their ideas.
When Amazon employees come up with a new idea for a business or service, they don’t just pitch it, they write a white paper.
Beth Galetti, Amazon’s Sr. VP of Worldwide Human Resources, explained the process and the rationale behind it in an interview with Gallup.
According to Galetti, the employee uses the paper to explain the reasoning and approach behind the idea, to proactively answers questions and potential objections, and to explain what he or she considered and rejected in developing this suggestion. Employees are also charged with developing a draft press release to illustrate how they’d launch the concept to the media and Amazon customers.
Then, they submit the paper for review and consideration.
This process teaches employees how to be disciplined in their thinking, to consider both the pros and cons of their idea, and to look at what they’re proposing from multiple perspectives. As a result, the ideas are better developed and justified before they are submitted, resulting in many successful employee-driven initiatives coming to bear.
This white paper process is also used by managers to justify employee promotions. The sponsoring manager must submit a paper that documents the employee’s successes, failures and gives examples of how the employee has grown. It also must include comments and feedback from that employee’s peers.
This process reduces the opportunity for bias and ensures that the best people are promoted.
2. Google OKRs
Google has employed an Objectives and Key Results (OKRs) goal-setting framework throughout its organization since this approach was introduced to the company by investor and venture capitalist John Doerr in 2000.
According to Doerr, the OKR approach gives employees a “Beacon or north star every quarter to help set their priorities,” and enables employees to see how their work is tied directly to the company’s goals.
The objectives (the “O” in OKR) define what employees need to accomplish during a specific time frame. The key results (the “KR”) are the measurable means and milestones required to achieve the objectives. The company sets its goals, then each team and individual employee establish well-defined, clear objectives to support those overarching company goals.
For example, if the objective is “Accelerate Revenue Growth of X Product,” the key results could include:
- Launch new product feature add-on to increase revenue per customer by x%
- Expand into x market or x region
- Secure tech support to build out x feature by Q2 2023
Individual objectives and key results would align with these broader goals. All of these objectives are transparent, so everyone in the organization can see what other employees are working on, and everyone is focusing on achieving the objectives that are most important to the success of the business each quarter. According to Doerr, this framework also helps with accountability and coordination between teams.
Best Practices for OKR implementation
The real key to Google’s success with OKR is largely due to the way its leaders implemented this framework, following these best practices:
1. Get buy-in from everyone
According to Doerr, it’s imperative that the entire company, from CEO to the junior developer, commits to the framework, which is why Google leadership launched the program to the entire company, in one room, at one time, with total leadership buy in.
2. Assign someone to shepherd the process
Select one person, or performance manager, to oversee the training, track progress and make tweaks during implementation, as needed. This person can be the COO, Head of Human Resources, an engineering leader, or anyone else on the leadership team.
3. Set measurable goals
Make sure your OKRs are quantifiable and use measurable, tangible targets.
4. Make it part of the corporate DNA
OKRs, whether at the corporate level or the individual level, should be visible throughout the company. New employees at Google receive formal training on the OKR system as part of their onboarding.
5. Do not tie OKR goals to bonus payments
At Google, OKRs are not tied to bonus payments, except for sales quotas. Leadership believes that this approach better enables them to use OKRs to build a “bold, risk-taking culture.”
Here’s a detailed guide from Google on how to set goals with OKRs.
3. Netflix: “Context, not Control.”
Netflix’s approach to performance management is based on the principle that its employees are fully formed adults who don’t need to be told what to do if they are given the context, they need to make good decisions. To that end, everyone is made aware of the organization’s overall goals, the priority of those goals, the key stakeholders and the definition of success.
According to an article in Talent Management magazine by Patty McCord, former Chief Talent Officer for Netflix, the company eliminated annual performance reviews many years ago because they were “too ritualistic and too infrequent” to have an impact. Instead, Netflix asked managers and employees to have conversations about performance as an organic part of their work.
When Netflix stopped doing formal performance assessments, they also instituted informal, 360-degree reviews, in which employees were asked to identify things their colleagues should stop, start or continue doing. Although this feedback was originally collected anonymously, the company shifted to signed feedback, with many teams in the company opting to share this peer-to-peer feedback face-to-face.
4. Multiple Companies: Facilitating Peer Feedback
Netflix is not the only company embracing some sort of peer feedback as part of their performance management program. Many organizations, including Google, Hubspot and Facebook, have peer review programs in place, and are providing software to facilitate the process. For example, Facebook has given employees access to software that enables them to “recognize, acknowledge and show appreciation for people who have done great work,” and “ensure that each person is getting feedback from all the colleagues they work with most regularly.”
Today, more organizations are taking a new approach to employee development, creating an ongoing dialogue, a deeper understanding of company goals, and giving each employee the tools they need to more actively contribute to the company’s success. Based on the results, it’s a trend that shows no sign of slowing down.
