It’s the end of the year which is typically the time when many companies go through torturous annual “performance evaluations” process for their employees – perhaps that’s why there seems to be a renewed interest in this subject by media and professional forums. Indeed, from NPR reviewing much-hated ‘classic’ “rank and yank” approach to re-kindled debate about suddenly popped up old presentation covering unorthodox HR methods at Netflix – it seems the methodology of how we assess employees’ performance is anything but a closed subject.
Of course, on surface any approach would argue that it is about creating great teams by selecting the “top performers” – just like the ‘father’ of forced ranking ex-CEO of GE Jack Welch explains in the recent WSJ article or Patty McCord from Netflix who talks about the importance of having “stunning colleagues” who inspire each other to deliver the best performance. This is all true, of course, but there’s one critical question to answer here – how to single out the top performers in an objective and consistent way across the entire organization which is typically huge (at small companies everything is kind of obvious anyways). The widely adopted approach here is tracking multiple types of behavior – such as “seven aspects of Netflix culture” (the number can vary depending on the company). But that doesn’t address the core issue – how to distinguish the true performer from a careerist who is more preoccupied with making a good impression than actually contributing to the bottom line?
The truth is – no matter how good of a manager you are – at the end of the day the employees with their boots on the ground working with each other on a daily basis – they know the best who is who. You just need to find a way of getting it out from them. As simple as it sounds 🙂
But how? Myself, I have been dealing with this issue for years now – having worked with dozens of peers, bosses and subordinates and going through the whole spectrum of experiences – from horror stories to collaboration made in heaven. In retrospect, while most of people have varying ‘hard’ and ‘soft’ skills which are more or less important in a particular context, at the end of the day there was one thing which really counted. That something could be best described as an answer to a single question – “would I hire him/her to my own startup“?
…which prompts another question – can we have a single measurement which would assess an employee’s value to the company? Could we for example do the following:
At the end of each cycle we generate the list of, say, up to 20 people each individual worked with the most throughout that period. It is important to adopt a consistent approach of generating the list – and under no circumstances leave it to the employee to cherry-pick it. One way of doing it could be via analyzing the email traffic, meeting invites etc. Alternatively, the manager could come out with the list for each engineer in his/her team (naturally, the list will have to include the manager and all the direct reports by default). The point here – to come out with the full list of colleagues the given employee had interacted with (or “got exposed to”) the most. This is a separate question not really tied to the gist of the proposal, which is coming next.
Each person on the list then asked to anonymously answer a single question: “On a scale of 1 to 10, how likely are you to hire the person X into your own company?” – with 1 meaning “under no circumstance” and 10 meaning “would absolutely hire”.
Naturally, the results will be skewed towards positive (we usually do not like to throw our colleagues under the bus), but that could be taken into account – i.e. consider the answers 1 through 6 as generally negative, 7-8 as neutral, and only 9-10 as positive.
If the above looks a lot like “net promoter score” (NPS) – the similarity is actually intentional. Indeed, NPS – after a lot of wranglings about how to measure the success of a product or a company – ended up as the single point measurement increasingly embraced by various industries (the key – only! – question there is “On a scale of zero to 10, how likely are you to refer to a friend [a product or service of a given company]?”). Naturally, it’s not perfect – as any attempt to jam a complex assessment of business (or a person for that matter) into a single digit is by definition just an approximation – but it comes pretty close to what companies want to track: market data shows a strong correlation between the NPS and financial success of a company – unlike any other single measurement out there.
My hunch (do not claim of having any real-life data) is that by applying this methodology you’d end up with pretty good understanding of who is the top performer in your organization – those would consistently fall into the 9s and 10s – while others would be more in the middle. If not the only metric, this could be at the very least used as a strong signal “from the bottom” which is better be listened to.