The Framework

What defines performance

The first step in creating a high-performance organization is defining what top talent looks like. Through a long process of trial and error, we ended up articulating performance over three dimensions: deliverables, skills and culture.

We found that each of these three aspects is essential and must be measured separately. Take a software engineer for example. Even if their performance is great, failing to align with your company culture will cause toxic team dynamics and friction down the line. In another case, if they consistently deliver on the projects assigned and are a great fit with company, how do you know they’re ready for the next level? You need a solid understanding of their skills versus those required in a more senior role to be able to decide.

Deliverables

Deliverables measures the ability to complete tasks assigned, whether it’s setting up a process, writing code, launching a marketing campaign and so on. This is further articulated into speed, quality and complexity, which we found to be the best logical components to evaluate employees' work. Explaining further:

1. Speed is the employee’s ability to meet deadlines

2. Quality is measured by the number of iterations required to achieve a task - ideally, work should not require more than a single iteration

3. Complexity is the degree of precedent a task has - routine tasks have the lowest complexity, while the most complex tasks have no precedent inside or outside your company

Speed, quality and complexity should be standardised across the company. The score can be then combined through the formula [Speed + Quality] * Complexity.

Skills

Skills are the technical competencies required for the role; they provide a clear view of expectations, that can be used by both:

1. Employees, as a roadmap of what to focus on to grow into a role

2. Recruitment, to find the right people and test their abilities

Think about a data scientist. You will probably break down their skills into a combination of a) theoretical knowledge of statistics and machine learning, b) coding proficiency (e.g. in Python) and c) ability to manipulate data and design effective models. You will then evaluate each of these skills separately.

How do you define skills though? We recommend finding “functional leaders” in your company that can own the skill definition for each of your roles - for example, your CTO would be the “functional leader” for your engineers, and define the skills for data scientists, frontend developers etc.

You can learn more about how to define and set up skills on RevolutPeople here.

Culture

Culture represents alignment with the company’s cultural values. We found that the best way to instil a strong company culture is to make it part of performance reviews.

We recommend breaking down your values into expected behaviours to ensure your culture does not remain at abstract principles. This will give actionable examples for your employees to follow and help them embody your company culture in everyday tasks.

If you are looking to implement culture assessment on RevolutPeople you can read more here.

Standardising performance via scorecards

Any performance management system is useless if it lacks consistency. What if your managers apply different standards in performance reviews? How can your employees understand what they need to achieve for a promotion?

Our solution was to standardise every performance assessment, via scorecards. Skills, deliverables and culture are assessed by managers via a series of true/false statements about employee behaviour that are standardised across the company. This removes manager bias in evaluations and gives clarity to employees in terms of what they need to improve.

We build scorecards with 2 things in mind:

1. Consistent scoring - the same 5-level scale is used across all scorecards: Poor, Basic, Intermediate, Advanced, Exceptional. Poor refers to “red flag” behaviours - no one in your company should exhibit these. Exceptional is the level that only the very best in the field should hit.

2. Observable behaviours - Think about the behaviours you’d want to see in your employees and build a scorecard around them. This approach reduces manager bias by giving them precise behaviours to track in performance reviews while providing employees with clear goalposts to hit.

Putting the scorecards into practice

For each performance dimension, managers can assess their teams' performance by simply thinking about their actions over the past few months and filling in a series of statements with yes or no answers. Statements are grouped by proficiency level, so once a “No” answer is reached, there is no need to fill in the rest of the scorecard - the employee’s level is already indicated.

Once the scorecards are filled in, the performance evaluation results become a matter of simple calculations, with results in the "Deliverables" category aggregated using the formula [Speed + Quality] * Complexity. To understand the mechanics behind these calculations see our working Google Sheets template and the "Parameters" sheet.