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Thread by @kennethmayer: "So, if y'all listening, I'm going to try an experiment with my stalled writing process. I want feedback. I welcome feedback. I will exchange […]"

, 66 tweets, 10 min read
So, if y'all listening, I'm going to try an experiment with my stalled writing process. I want feedback. I welcome feedback. I will exchange 🍺🍷🥃🍕 for feedback. I'm writing a blog post (y'know, long form tweeting) about annual performance reviews.
"Yay! It's time for my annual performance review!" -- No one. Ever.

(I'll also throw in references, like this one:…)
Here's a more interesting statistic: "only 4 percent of HR managers think their system of assessing employees is effective at measuring performance — and 83 percent say their systems need an overhaul."
So here's my modest proposal. Since annual performance reviews suck.


Let's evaluate the evaluations. Annual performance reviews do not accomplish even their nominal goal of providing a review, annually.
If you are really good, you might remember what happened 4 quarters ago, but not likely. Will your manager? And if so, will they weigh the achievements with an even hand? Human psychology has a bias toward more recent events.
For good reason. Our genetic survival depended on it.
Here's another fatal flaw in annual reviews: They are too late to be effective. Feedback is only effective within a short time window of an event. Once your mind has moved on to other things, the feedback will have little relevance.
And yet another: 360 reviews, peer reviews, bottom up, top down, choose your poison, don't / can't provide an objective picture, and if there are institutional biases, you harm the /most/ vulnerable to bias.
Hang in there. I do have a suggestion. First, however, I want to make sure that you are not just emotionally but factually convinced of my argument, because my solution should solve for those pain points.
Did you know that compensation budgets have not moved more than 2-4% since the 1990s? Those budgets are set at the beginning of a fiscal year. Doing extraordinarily well is unlikely to move the needle.
As a manager, I was handed a compensation budget that I had to dole out to my staff. It became a zero-sum game where my goal was to optimize the salaries so no one would be so unhappy that they would quit.
The Fortune 500 has been setting the pace for "variable pay" programs where bonus and incentives are making up a larger portion of the "total compensation" package.
Top that off with gobs of research that shows that employees leave more often because of their manager than their compensation.…
Human resource departments call it "calibration." The art of adjusting compensation according to some standardized value. Yeah, good luck with that.
Allow me to quote a friend:

The question I always ask my clients is “is the performance review tied to compensation”. Those that say yes are going down a slippery slope and generally find the whole process excruciating.
If you have performance goals, what does "good" ("great," "poor," etc.) performance mean in terms of personal career growth on one side and company growth on the other?
Annual reviews cost money. In the time spent collecting, collating, folding, bending, spindling, mutilating. Data that no one reads except for one word. Actually, a number.
What is the business purpose of annual reviews? Meaning, why are business spending money on it? In a rational world, we would examine the costs and benefits and make a rational decision. I think that, by now, I've convinced you that the nominal reasons are bunk.
It certainly doesn't provide constructive feedback to improve performance. The recent data shows that it doesn't affect retention, either. So why bother?
The only reason that I've been told that makes any sense is deeply connected to the primary purpose of any human resources department.

Equal Employment Opportunity Commission. Office of Federal Contracts Compliance. CFR ... & ... & ... May demand to review employment records to determine if an employer is in compliance. In 2005, companies earning $50K annually, and probably hasn't been adjusted since.
From another HR pro: "The regulatory environment has become so onerous that these same conservative HR teams don't update job descriptions regularly because of all the stuff they believe must be included in job descriptions so as to land on the right side of the judgment"
Human resources departments really should be named, "Employment Risk Management" because that is what the really do. Just ask anyone who has filed a complaint about anything, anywhere to their HR departments. HR's number one job is to reduce risk & liability.
What are key attributes to reduce risk?
- Documentation
- The appearance of fairness
- Job classifications (a technical term of art)
- Format and timing
- A standardized application of the evaluations, and all other decisions
After all that, it doesn't change a thing. "After 30 days, your raise is just your salary."
Okay, there are lots of organizations that don't focus on talent development. It's not important to them. Annual reviews there make even less sense to me (but I'm really not qualified to judge them).
Phew. I need a breather before I go on. The conversation in my head has branched off it bit more than I ... planned? Anyway, back in a few. Feel free to poke holes in what I've got so far. Or retweet, or whatever.
Okay, I'm back. Where am I? Oh yes! Stuck in my head.
Annual reviews suck. They don't actually review. They don't actually improve (or change) performance. The compensation change is just a random number between 2 and 4%. They do provide a paper trail of good intentions in case someone gets litigious, soooo
Let's do a little thought experiment: What if we didn't do annual reviews at all? After the hearty sighs and hallelujahs, someone is going to mumble something about compensation adjustments. What if we just said, "Nope. Not gonna them either."
Instead, we'll establish a culture for real-time, contemporaneous performance feedback. It's the new hotness anyway. Just ditch the whole annual "I met my KPIs now show me the money Kabuki dance."
I promise I will address compensation. Soon.
We do need a way to document this feedback. For HR. For managers. For succession planning. It needs to be very low ceremony and lightweight. And the ability to be confidential.
But mostly it should be public! One of the top intrinsic motivators is PUBLIC recognition (stick that in your confidential annual review pipe and smoke it).
1. Don’t promise rewards in advance.
2. Keep anticipated rewards small.
3. Reward continuously, not just once.
4. Reward publicly, not privately.
5. Reward behaviors, not only outcomes.
6. Reward peers, not only subordinates.…
Notice the tight, fast response feedback loops there?
What about a flat base salary, and fixed COLA and bonuses?

> People get very touchy when their bonus is tied to peer reviews and “bosses that are out to get me” and “subjective evaluations”.
So here's the modest proposal: Staff can ask for a change at any time, but here's the catch, it is up to them to justify the change.
When I was forced to do reviews, at annual review time, my staff crafted their performance review like this:

Imagine you're writing an essay titled, "Why we like X so much that we want to give them this much more money."

This is just the same thing, writ large.
I'm asking staff to step and speak out for themselves. know their own value and make a compelling argument. These are skills and traits that I want in all of my staff members anyway. They might as well use it for their own benefit.
They will learn how to research a market (about themselves). One thing that I'd include is training and resources from HR to do so. Most economic theory is based on the free flow of information. Here, more than anywhere, I don't want one party to wield power over the other.
Negotiating is yet another valuable skill to learn, but hard to fit into the other demands of a tech life. Let's make it worth the while.
Making a compelling proposal is also a key business skill that I want everyone to have. It scales with experience.
Here, past accomplishments and future goals have a monetary value, with immediate feedback. If I agree with the proposal, I sign it, send it to HR and payroll. The review is over. If not, this becomes the time to negotiate.
Netflix has (had?) been doing this for years, although in a harsher context: You had to reapply for your job every year. My plan is supposed to be a bit more balanced. You don't lose your job, but you won't get what you proposed, either.
There's some time for reflection. Staff can use the same performance review tools that we managers use to assess value. And in the end, that one number is the key feedback data point, so lets put the effort and focus on that.
Don't tie compensation changes to performance review and feedback.

Full stop.
What if things go horribly wrong? Well, I can always coach staff who are having trouble writing the proposal. Or I can have them pair up with a mentor. I can also just say, you know, you've sold yourself short, here are some things you forgot. Go fix it.
For mediocre performers, I could also just keep my mouth shut and keep the windfall. I'm not perfect, and human nature being what it is, I expect that no one else is either.
If the argument is swinging the other way, we need to come to some agreement about value. Remember, most employees don't leave because of compensation.
Here's another benefit: There's been a trend here in SF that techies get their raises by walking across the street. That's a big loss for employers who want to retain talent. Unfortunately, there's rarely a mechanism for an internal bump of that size.
Here's a built-in process for reviewing big discrepancies that won't chafe.
Employees hate reviews. Managers hate reviews. They suck. We've been caught in an "It's always been like this" mindset. I'd like to think that this alternative costs less in time to prepare, but even if it takes the same, the time is well spent.
Both sides come out of the meeting with an understanding of their value to the company. If I'm unhappy with the change, then it's my own fault for not making a better proposal. If the employer's being a jerk, I'm walking anyway.
The rest of the outcomes are win-win.
There are some things to work out. I don't have good answers. The HR directors and CFOs are going to have a field day.

Budget. How do you prepare for a variable compensation pool?

Abuse by bad managers. w/ sites like Glassdoor, it's harder to be a jerk without getting noticed?
Bias. Over time compensation packages will drift. Data science in the HR department? How do you make corrections?
Skillset. I suck at salary negotiations. I'm motivated by other factors (although I do want some comfort and safety that only dollars can provide).
I realize that I just admitted that I can be played by my own staff. If they're listening. Remember folks, nothing happens in isolation.
Compliance. I have no idea whether this plan would pass regulatory muster. I suspect it does (e.g. Netflix).
In closing: We spend literally billions of dollars on a waste of time. I'm proposing something that is "hard" (as in hard work), but more worthwhile, and will probably cost less (but I can't prove that).
And everyone walks away somehow validated about their worth.
Thanks @joshsusser! This all started with me yelling at the radio while listening to… with @sarahmei @avdi @CoralineAda and cmaxw (I thought you were in the episode, too, but I must've dreamt it?)
Oh, yeah, one more thing: If you DON'T want to negotiate, that's okay with me, too. We'll simply apply an organization-wide, standard, publicly announced cost of living adjustment. Moving on.
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