Career Trajectories

Impact of performance on career progression

Performance review outcomes play a critical role in determining career progression:

1. Consistently being an A-player and exceeding expectations can lead to promotions or salary increases

2. Underperformance on the other hand, can lead to different outcomes - employees can be put on Performance Improvement Plans or even leave the company

Path to promotion

The path to promotion for your teams should be clear and based on objective performance criteria. The usual corporate practice of basing promotion on tenure doesn’t work for a high-performance culture - employees should have an incentive to perform above and beyond. A scale-up will also face other issues with this strategy:

1. You can’t just make up unnecessary new roles or titles when an employee is promoted

2. Promoting based on tenure with the company is expensive

We believe the solution to this is twofold:

1. Seniority over job title - instead of receiving a new title, promoted employees are assigned a higher seniority level that comes along with a larger scope of work, higher performance expectations and a higher compensation

2. Clear trigger for promotion - when an employee outperforms their talent bar, eligibility for promotion is automatically “switched on”

Promotion should be treated as a way to reward A-players, incentivising employees to improve their performance. Retention should not be a reason for promotion - promoting someone before they’re ready creates a bad precedent that skews team expectations.

The promotion process

Promotions take place every 6 months, with the performance review process lasting two weeks longer to accommodate for it. The reason is simple; employees need to prove a consistently strong performance that lasts beyond one review.

Although eligibility for promotion is automatically switched on for A-players, the final decision still requires management recommendation. The process works as follows:

1. Automatic promotion eligibility - Managers receive a list of direct reports that are eligible for promotion from the Performance Team:

   • Being an A-player in at least two of the last four performance reviews, based on the employee’s current seniority (the rule is at least twice in the last four reviews for Junior to Mid promotions and four times in the last four reviews above Mid)

   • At least 1-year tenure in the employee’s current seniority level

   • No Unsatisfactory or Below Bar performance review ratings

2. Validation or rejection of promotions - Managers validate or reject the promotion nominations for members of their team; their recommendation needs to be supported by a business rationale and solid evidence for promotion (for example by submitting a business case in the STAR format i.e. Situation, Task, Action, Results)

3. Approval of promotions - top management reviews and validates the list of promotions; for each employee, promotion decision should pass through:

   • The relevant business unit head

   • Any relevant vertical business leaders

   • The CEO / one of the founders for final validation

4. Announcements - promotions are announced to employees and salaries are automatically adjusted for the new seniority levels

Improvement plan

But what happens when an employee's performance doesn’t reach the talent bar? How can we support them in finding the best path forward, whether this means turning things around, or exploring opportunities better suited to their strengths?

Experience has shown that employees are unlikely to naturally return to an "above bar" level of performance in a role were they have been consistently underperforming. To counter that trend, you should offer employees a choice - when someone falls below the talent bar, they can choose to:

1. Take an enhanced separation package equivalent to what they would earn over the next 6 weeks and their notice period, and leave immediately

2. Or enter a Performance Improvement Plan (PIP) to reach an “Above Bar” performance in the next review

The Performance Improvement Plan (PIP) lasts 6 weeks and:

1. Is managed by the employee’s manager with oversight by HR

2. Helps the employee work towards a series of clearly defined targets following the SMART framework (Specific, Measurable, Achievable, Relevant and Time-based)

3. Includes an interim check-in to review progress

4. Concludes with a decision from a Committee on whether the employee should continue work as usual

Setting in place a Performance Improvement Plan ensures that employees have the chance to turn things around and improve their performance through a concrete plan. In addition, it helps you remain in compliance with local regulations, which often require a series of formal processes when it comes to employee underperformance.