Performance management- shift from a black box to a white box!

Photo by Kolleen Gladden on Unsplash

While being an engineering manager for some time and talking to other leaders I have seen that performance management is a mystery for most people. This includes both sides — leaders and engineers. In this write-up, I will stick to the performance management of the individual contributors. I will clearly lay down what are the important facets of performance management and how to keep improving them on a day-to-day basis.

So “why” is performance management so important? There are two things that we all care about at work.

1. How am I doing?
2. How can I improve my performance?

It is all about the growth and development of individuals working with you. And because of this, performance management becomes more and more important.

Before we start talking about “Performance Management”, let’s understand the terms ‘performance management’ and ‘performance evaluation’. Management happens all the time directly or indirectly. Performance evaluation is a snapshot summary at a given point in time.

Performance management for an individual can be done by himself, peers, or anyone in the chain of hierarchy level up or down. Performance evaluation is generally done by the people manager responsible for your outcomes by considering the inputs/feedback from all the stakeholders and the individual. These practices also change from company to company, team to team and manager to manager.

First, let’s understand the challenges of performance management. A few reasons that I think make performance management so daunting are -

• We make performance management very complex
• Engineers also don’t show a lot of interest in knowing how is their performance managed
• Though performance management is very important most of the time there are no standards for it. The yardstick changes from manager to manager, company to company.

As a result of this more often than not the performance ratings (if at all used in the organisation) happen to be a surprise for the individual.

While I have seen engineers, leaders and managers struggling with this, I happen to have worked with some great managers who helped take out the subjectivity from the topic and make it more objective.

This is what I call making performance management a white box; not a black box.

As I see, there are three important pillars of performance management

1. Expectation setting
2. Goal setting
3. Check-ins/Performance evaluation

Expectation setting

This is the first and the most important pillar, as this is where things go wrong most of the time. If your organisation doesn’t have set expectations for each role, then this can take a lot of time to crack in the first place. Expectation setting is critical as each individual would know what business is going to expect from her to deliver in each area of competency in the role.

If you are starting from scratch, you can start aligning the expectations and outcomes to the values or mission your organisation has set. Eventually, it is a good idea to land a set of technical and non-technical competencies against which we can set the expectations for the engineers.

In some of the big organisations, this expectation setting is done and aligned to the values. Like in Intuit we call it a role rubric. Role rubric is one place where we all see the competencies and expectations against each competency at each level. This also aligns competencies to the values that we abide by.

Whatever your situation may be, well-set competencies or starting from scratch, it is a good idea to have a framework and then keep improving it. The goal of this process is

• to understand what is expected with examples OR in other words what success looks like for a given role
• how these expectations align with the company’s mission/values
• avoid any biases in the process of performance management

The way I use the expectations framework OR role rubric is,

• whenever someone new starts on the team, this helps them set the goals at the right altitude.
• whenever you want to take on a new goal, you can look at the competencies that you may want to improve on
• Transparency to understand what other engineers in different roles bring to the table
• If you happen to feel you are outperforming this framework can tell you what competencies and what ways you do

Please note the expectation framework should have some durability. In other words, you can not keep changing the expectations every so often and expect all to align to the new ones. This will throw our people off track very quickly.

Goal setting

You are off to a good start if you have basic competencies and expectations from each role. The next important step is to make sure we have clear goals and KPIs for each individual.

What should be a goal for an individual?

A simple way to think of this is — A goal is a highlight of your career for the year. At Intuit, we have two types of goals, business development goal and personal development goal. In my teams, I also have a third goal that I suggest, my team members, to follow it is a stretch goal.

• A business development goal serves the business-focused outcomes like the project deliverables. This generally spans multiple quarters. This goal is also the goal that will more or less be similar for many of the same team members. The user story level details can be treated as milestones.
• Personal development goal focuses on the individual’s growth and developing skills beyond just the direct business focus. For example, communication skills, presentation skills, new technology or framework, etc. I suggest to my staff that you should always look at the expectations while taking on a personal development goal. This way all of us can focus on areas of opportunities and keep improving them year over year. By doing this you know in a few years time you are meeting the table stakes on the expectations.
• The stretch goal in my teams can be either stretching the areas of the above two goals or could be something new altogether that puts the individual out of her comfort zone. The first two goals are mostly the table stakes. This goal is to push us all to go above and beyond what is expected. This should generally span for not more than one or two months. In my team, the stretch goals are flexible and can also be just between the engineer and myself. Though it is advisable to have all the goals as public as possible.

The idea of these categories is to have a maximum of two or three goals at a time. If the stretch goal is to stretch in one of the personal development or business development areas then we end up having only two goals. So looking at the full year, an engineer might have achieved two or three business development goals; three or four personal development goals; six or so stretch goals. By the way, the stretch goal will not be met all the time, but it is left to the manager and the employee to decide that SMART stretch goal to consistently raise the bar.

This framework gives you easy ways to focus on table stakes and what is beyond expected.

How to make a goal SMART?

SMART means specific, measurable, attainable, relevant, time-bound. There are a lot of good articles out there on this topic. Here are some suggestions on making the goals SMART -

• Ask after what outcome are we saying the goal is complete?
• Timelines for the goal

Some examples that I coach my teams on are

• From “I want to learn this XXX tech” to “I want to learn this XXX tech to write an external blog post and one internal tech talk by end of this quarter”
• From “ I want to become a subject matter expert in ABC” to “I want to have two open-source contributions in ABC this year”

Another way to validate a smart goal is that — any of your stakeholders or yourself will be able to give a binary answer (yes/no) for the completion of the goal. If there is any elaboration needed for the goal completion then it is not a smart goal.

Check-ins/Performance evaluation

My fundamental is that everyone should roughly know all the time where you stand in terms of your own performance evaluation.

For managers, it is not sufficient to just set the goals and expect things will go fine. Managers need to follow up and check in regularly. As you know the intent of this process is to help everyone understand how they are evaluated and avoid surprises in the performance ratings during the evaluation. In this step, I suggest talking to your directs regularly and taking the stalk of the situation, focusing on what are the obstacles to achieving the goals set and in what ways they need help.

One of the most important things about these check-ins is to make sure the manager and the employee are almost on the same page in terms of how the employee is performing. I generally say 10% — 20% variance of understanding is fine but beyond that is a RED flag. Either the employee is not clear on the expectations or the manager is missing something out from the employee’s outcomes. If this happens a manager needs to sit down with the report to clear things out asap without waiting for a formal performance cycle.

One simple way to do this evaluation is to see the number of goals set by the report, how many of them were delivered successfully and if the consistency was maintained. So for example an employee has met all the business goals and personal development goals but is missing out on the stretch goals consistently; this means she is not going above what is expected. If she is meeting all three types of goals consistently you know she is surely exceeding the expectations, and so on …

This is exactly how the employee will also understand to self evaluate. Once everyone in your team would start self-evaluating based on a framework, managers can make the performance evaluation more objective.

TLDR; At the workplace, we all want to grow and develop ourselves and to do so, it is important that we understand how we are doing and how we can do better. Here is where transparent performance management will help. To achieve transparency and consistency, we discussed three facets, expectation setting, goal setting and regular evaluations. Following these three in that order makes a huge difference in how you and your team will see the performance management process and avoid surprises even during the evaluation process.

Hope this write up helps you improve the performance management or at the least forces you to think about how are we managing the performance of our teams.