Google hires people with no human resources experience to work in its People Operations function. This approach enables the tech company to produce modern ways of managing performance management.
Project Oxygen
In 2008, Google undertook Project Oxygen to study correlations between manager behaviours and team performance. Google has learned more about managers since the original research study. As the company has grown, they found that Googlers rely on their managers to make clear decisions and help collaboration across teams. The 10 Oxygen behaviours of Google's best managers:
- is a good coach
- empowers team and does not micromanage
- creates an inclusive team environment, showing concern for success and well-being
- is productive and results-oriented
- is an excellent communicator — listens and shares information
- supports career development and discusses performance
- has a clear vision/strategy for the team
- has essential technical skills to help advise the team
- collaborates across Google
- is a strong decision maker
We measure these traits in our ladder of leadership. We show people how to use their strengths and manage their challenges.
Performance management is entirely separate from goal management
At Google, this approach frees employees to set up stretch goals without worrying that they are setting themselves up for a challenge when bonuses are handed out.
“A [negative] dynamic exists when managers sit down to give employees their annual review and salary increase. The employees focus on the extrinsic reward – a raise, higher rating – and learning shut down. We have an embarrassingly simple solution. Never have the [pay and feedback] conversations at the same time. Annual reviews happen in November and to pay discussions happen a month later.” — Laszlo Bock, SVP, Google
Google’s Performance Management
Performance management is built around coaching by managers, and peer feedback, including an annual 360-degree review. However, if an employee requests the added feedback, they can have a 360 as often as bi-annually.
Employees can send $100 peer bonuses to fellow employees. They are encouraged to email “kudos” to recognize a fellow employee to their manager.
People Operations
“We need people to know how they’re doing, and we’ve evolved what might at first seem like a zanily compiled system that shows them where they stand. Along the way, we learned some startling stuff. We are still working on it, as you’ll see, but I feel pretty confident we are headed in the right direction. Moreover, with any luck, I can save you some of the headaches and missteps we had along the way.” — Laszlo Bock, SVP, People Operations, Google
Books like Work Rules by Laszlo Bock, and How Google Works, by Eric Schmidt, and Jonathan Rosenberg, illustrate how Google continuously iterates on people practices. It uses the massive amounts of data, gathered among its more than 50 thousand “smart creatives.” These are the staff in the fields of engineering, design, and sales. Many have been hand selected from the world’s top universities.
Google’s people operations cornerstones are:
Hire only the best
Sourcing, and selecting, only the best fit candidates amongst the best pool of candidates worldwide. While it is not possible to achieve 100 percent perfection in hiring, Google errors on the side of caution. Its errors tend towards false negatives. They are willing to risk passing on a great candidate instead of hiring a bad fit.
While our talent analytics have an 85 percent predictive validity, we have a similar error skewing. We recommend that you pass on someone when the odds are low that they might be a high performer.
Create a meritocratic environment
You need to find high potential people and reward the best performances correctly. You are hurting yourself if you do not understand the difference between high potential and high performance.
Develop employees to their full potential
Only through great people management, on-the-job coaching, peer-to-peer and outside training, and through a comprehensive 360-degree feedback collection process and understanding your team’s behavioural DNA can you fully develop your people.
Google as a benchmark
Smaller organizations can improve their performance management process by modelling some of Google’s practices. Why reinvent the wheel? Our strategic insights can help you get performance management practices that work for your organization.
Annual performance review (including mid-year checkpoint)
Regular performance check-ins, one on one meetings that include current work, career development, coaching, personal issues, etc. We recommend them weekly. They need to be a valued part of how you work. Not a dramatic — make or break — annual event.
Gather data:
- Google engagement survey spans much more than the regular engagement surveys.
- Annual Upward Feedback Survey — where their direct reports review supervisors — people leave managers, not organizations — so, ensure your system develops excellent managers and removes bad ones
- Management-by-Outcomes — state outcomes that goals or objectives — painting a vivid picture of those outcomes, reshaping and redefining them over time creates excellent services, products, and processes
- Compensate people based on merit. It will be unequal.
Performance reviews
Google’s annual performance review cycle has two parts:
- a “preview,” at the end of the first semester
- a complete review that happens between October and November
This review occurs concurrently with its 360-degree feedback collection process.
When attributing their employees’ performance ratings, the two main things that managers consider are:
- the results reached, or what the employee accomplished
- the behaviours, or how the employee reached these results
An employee starts with a self-assessment. The second element is peer-reviews, whose authors are only visible to managers. The employee has access to the anonymized content of peer reviews.
Annual Peer/Direct Report Survey
Employees are asked to review each other, and their direct reports. They use the following criteria:
- adherence to Google’s values — this is the central element
- problem-solving — analytical skills applied to work situations
- execution — high-quality work with little guidance, or the magnificent delivery of work without the need for much hand-holding from managers and peers
- thought leadership — being a reference for a given niche of expertise, the go-to resources for specific themes, educating colleagues on tech-talks, training customers, and producing high-quality content
- leadership and emerging leadership — showing leadership skills, taking the lead of projects and problems, being pro-active, and owning results personally
- presence — making himself or herself heard, and intimately related to emerging leadership
Self-Evaluation
The first step in the performance review is self-evaluation. An employee evaluates themselves in the five criteria described above. The five-point scale ranges from “never demonstrates” all the way to “always demonstrates.” They are asked to share examples of actions that support their rankings.
They also highlight their main accomplishments in 512 characters for the last cycle. This text of achievements appears in the 360-degree reviews. Peers assess their proximity with these projects and know the impact on their results.
360-Degree Feedback
Some employees are great at “managing up.” They paint a rosy picture of their contributions. Others contribute significantly without any fanfare. Often managers carry a biased and limited impression of reports’ impact and behaviour. The 360-degree review process gives managers a holistic picture of their direct reports.
Together the employee and manager pick a representative sample of peers to take part. The employee suggests a shortlist. The list is discussed and confirmed with the manager based on how close the peer was to the employee’s contributions, and how well they can assess the employee’s performance.
Each peer supplies assessments in three different media:
- strengths — or things that the person should keep on doing
- weaknesses — or things that the person should consider improving or developing
- commenting on the employee’s contribution to specific projects
The two open-ended fields (positives and negatives) evolved from a more substantial form a few years ago. In Work Rules that the simplification reduced aggregate time spent on this step by more than 25%. Moreover, it improves the share of participants who perceived it as useful from 49% to 75%.
Calibration
Managers hold annual calibration sessions. They focus on top-performing employees they would like to promote. It is part of an ongoing succession planning activity. Calibration helps managers avoid recency bias and score employees on a five-point:
- scale needs improvement
- consistently meets expectations
- exceeds expectations
- strongly exceeds expectations
- superb
Goal-setting, using the outcome-focused method, ensures employees stay on track. However, it is an entirely separate process from performance management. Managers and employees agree on goals every quarter.
“I don’t give a promotion based on what you did – how you did it matters, too.” — Peter Scocimara, Senior Director, Google
No scores are final before the calibration process, again, described by:
“The soul of performance assessment is calibration… A manager assigns a draft rating to an employee – say, “exceeds expectations”- based on mainly OKRs (key-outcomes) but tempered by other activities, like the volume of interviews completed, or extenuating circumstances such as a shift in the economy that might have affected ad revenues. Before his draft rating becomes final, groups of managers sit down together and review all their employees’ draft ratings together in a process we call calibration… A group of five to ten managers meet and project on a wall their fifty to a Thousand employees, discuss individuals, and agree on a fair rating. This allows us to remove the pressure managers may feel from employees to inflate grades. It also ensures that the results reflect a shared expectation of performance since managers often have different expectations for their people and interpret performance standards in their idiosyncratic manner… Calibration diminishes bias by forcing managers to justify their decisions to another. It also increases perceptions of fairness among employees.” — Laszlo Bock
The calibration process corrects for heavy-handed and light-handed raters.
Outputs
The calibration meetings produce every employee’s performance rating for the period. Then managers hold two meetings:
- one to provide feedback — considering peer reviews and managers’ impressions of their employees
- another to discuss compensation and promotion decisions
These conversations are held in different meetings. A different dynamic exists when a manager sits down to give employees their annual review and salary increase. The employee focuses on the extrinsic reward — a raise, higher rating – and learning shut down. So, hold these meetings at least a month apart. This separation helps improve the effectiveness of these meetings.
“Traditional performance management systems make a big mistake. They combine two things that should be completely separate: performance evaluation and people development. Evaluation is necessary to distribute finite resources, like salary increases or bonus dollars. Development is just as necessary for, so people grow and improve.” — Prasad Setty, Google
Concluding Thoughts — Managing Performance Management
High-potential employees deliver strong results, master new types of expertise, and recognize that behaviour counts. High-potentials have the following four factors that distinguish them from the other employees:
- drive to excel
- catalytic learning capability
- enterprising spirit
- dynamic sensors
Use best-fit staffing to find high-potential employees. People motivated by envy, jealousy or the desire to be in their shoes may consider derailing their careers.
In addition to your unequal compensation package, to keep these stars, here are the six most important things they need to assure that their career stays on track:
- feel valued and respected — be a leader who provides a transparent relationship and allows them to share their opinions and points of view without running the risk of looking disloyal or untrustworthy
- sponsor advancement — be a leader that has their back and is willing to open new doors of opportunity — you need a succession planning process in place
- genuinely invest in growth and development — be a leader who invests their time and resources to assure their professional growth and development still is on track
- exposure to people of influence — be a leader that had enough self-trust and confidence to provide a seat at the table with your boss
- do not be threatened — be a confident leader that is not threatened by their star’s potential
- encourage risk-taking and exploration — be a leader that allows your stars to learn from their mistakes and guides them to overcome the burdens associated with failure
We can help you get your performance management practices for superior results.
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