4 Unique Performance Management

Techniques
Topics: Growth
From Amazon, Google and Facebook and More.
August 17, 2018

It is every HR leader’s dream to build an organization where employees happily do their best
work day in and day out without having a lot of “hand holding from management.”

Over the past few years, many organizations have done away with the traditional annual
performance review in favor of real-time feedback. Rather than looking to the past, more
organizations are putting in place mechanisms that focus on employees’ on-going growth and
development.

Below, we’ll talk about some companies that have established creative alternatives to traditional
performance reviews.

1. mazon’s White Paper Process

Subtle
Photo by Piotr Cichosz on Unsplash

When it comes to motivating employees, many HR leaders have talked about the importance of
communicating the company’s mission, values and vision. The idea is employees will work
harder and smarter if they feel a connection to a purpose that’s greater themselves.

Amazon has taken this a step further. They’ve decided that while principles and values are
important, it’s just as important to establish the right mechanism to “nudge” people towards
desired behaviors.

“Good intentions don’t work, but mechanisms do,” said their founder and CEO, Jeff Bezos.

One of the mechanisms they’ve developed is known as the white paper process, according to
Beth Galetti, Amazon’s Sr. VP of WorldWide Human Resources.

To make decisions (when someone comes up with a new idea for a business or service), Amazon
asks them to write a paper. As Beth Galetti explained in her interview with Gallup:
This paper outlines their reasoning and approach, anticipates and addresses tough questions, and
states what else the person has considered and rejected in developing this suggestion, and even
includes a draft press release that showcases the customer experience at launch.

When the document is developed, team members sit together to read the white paper. This
happens before any further discussion begins — so that everyone understands the full
perspective of the author and discussions are grounded on a common set of facts and
assumptions.

By using this process, the author has to be disciplined in their thinking, consider the objections
and how to overcome issues. This prevents people from falling in love with sub-par solutions.
With this white paper process, Amazon has had an incredible track record of launching new
products to success.

What’s really interesting is that the process isn’t just for making business decisions, it’s also a
core part of Amazon’s pay increase/promotion process. It’s how the company ensures that one of
their values — “constant learning” — is put into practice.

For many organizations, the way promotions are decided is based on the employee’s
accomplishments and successes. But not the case at Amazon. When a manager is looking to
promote someone, they are required to write a white paper that documents the employee’s
successes, failures and how the person has grown in the process. The manager sponsoring the
promotion needs to identify people who have worked closely with that employee, get specific
feedback and incorporate it into the white paper.

According to Beth Galetti, Amazon’s review process “attempts to collect data on each individual
employees’ superpowers and areas of strength.” The manager who is sponsoring a promotion
must gather the “superpowers” for each individual employee as part of their peer and manager
feedback, and request areas for growth for the employee to work on.

To make sure this feedback isn’t cumbersome to collect, they keep this process brief — 60 words
or less each for the superpower and growth questions.

Related Resources: Creating an environment where employees receive regular performance

feedback is a key part of retaining great people. The other part is making sure you’re
compensating employees appropriately for their performance. For guidance on how to use your
compensation plan to motivate high performance, check out these resources:

 Variable Pay Playbook (ebook)

 The pros and cons of using cash vs. non cash incentives (webinar)
 Using Compensation to Motivate Performance (ebook)

2. Google OKRs

Formal rankings had never been part of Google’s performance management philosophy. Instead,
the company focuses on employee-goal-setting. KPCB’s John Doerr originally brought this style
of goal setting, using objectives and key results (OKRs), to Google from Intel, when the VC fund
invested in Google.

The idea behind the OKR, according to John Doerr, is that employees would have a “beacon or
north star every quarter to help set their priorities,” and every employee would be able to see
how their work is tied directly to the company’s goals.

What Are OKRs?

The “O” in OKRs are the Objectives that you want to accomplish; these should be aligned,
supported by the organization and aspirational (e.g. not so easy to achieve). Key Results explain
how you’ll get there. They should be measurable, limited in number and have a deadline. The
way the OKR system works is that the company as a whole would set specific, measurable goals
every quarter. Then, each team and individual would set their own goals which would focus on
what they can do to help the company meet its goals.

According to Doerr, goal setting is important for businesses because they help the entire
company focus; rather than listing 20 goals, through a disciplined process of writing and
brainstorming, the group ultimately selects 3 to 5 goals it deems to be the most important ones to
the success of the overall business for the upcoming quarter. Further, goal setting helps with
accountability and coordination between teams.

Although goal setting is nothing new in the corporate world, Google has done a few things
differently to ensure that OKRs were implemented successfully.

1. Buy-in from everyone

According to Doerr, the entire company must have conviction around goal setting, meaning that
everyone from the CEO to the junior developer have chosen to commit to it. At Google, OKRs
were initially introduced to the entire company gathered in one room and immediately embraced
by the leadership team.

2. Assign someone to shepherd the process

Ensure that one person takes ownership for getting everyone on-boarded. This person is
responsible for educating the team, tracking and grading progress and making the necessary
tweaks to the implementation. This can be the COO, Head of Human Resources, an engineering
leader, or anyone else on the leadership team.

3. Set measurable goals

Google’s OKRs are quantifiable; they use measurable targets (e.g. shipping a certain number of
products or hitting a release schedule). However, OKRs are considered, tracking is part of the
accountability piece.

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.

5. Do not tie OKR goals to bonus payments.

At Google, OKRs are not tied to bonus payments, except for sales quotas. They chose this
because they wanted 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 believes that employees are fully-formed adults who can handle anything as long as
they’re told the truth. Part of this philosophy is that employees don’t need to be told what to do;
they can make sound decisions on their own when they have the full context. When setting goals,
managers should make their employees aware of the organization’s overall goals, the relative
priority of the goals, key stakeholders and the definition of success.

On performance, according to Patty McCord, co-author of the Netflix culture doc, in an

interview with Harvard Business Review, explained that Netflix believes that regular, candid
conversations about performance are best:

If you talk simply and honestly about performance on a regular basis, you can get good results —
probably better ones than a company that grades everyone on a five-point scale.”

4. Give employees software to facilitate year-round feedback

Many companies, including Google, Hubspot and Facebook, have placed great emphasis on peer
reviews and they’ve given employees social software to help facilitate the process. For example,
Facebook has given employees access to software that allows staff 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,” according to its VP of
People Lori Goler.

Tell us what you think

Has your company revamped your performance management process? What are you doing
differently? How is it working? Share your experience with us below.

Learn More About Our Compensation Software

 
Tags: Employee Retention, Performance Management
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