Improving How We Manage Performance

Shortly before or after this article is published, all Workpay employees will have received their 2024 Performance Review Packet through the new Workpay Performance Management Module. This is a big milestone for the company's operations and its product, as this is the first time the company has not used a third-party system for reviews!

It has been a long and bumpy road to get to this point, and great thanks is due to those on the Product and Engineering Team who worked to get us to this point of self-sufficiency. Special recognition is due to Joan and Tony, who provided continuous hands-on support to the People and Management Teams to get this done.

As always, thanks is also due to all the managers who took considerable time away from their normal responsibilities to put considerable thought and time into providing actional feedback and reflections to their team members to help improve their performance.

The managers’ patience with and commitment to a new system has provided the Product Team with extremely valuable user experience insights that will lead to key improvements in the future. New software tools are never without limitations and bugs, but the system continues to improve thanks to this collective trial.

Separate from the product, this experience has also led the People Team to reflect on the process of performance management. After considerable discussion and research, and thanks to feedback from the Management and Leadership teams, People Ops is excited to announce a new and improved performance review process for 2025.

Limitations in Current Process

1. Limited Frequency: Upon review, many of the challenges that managers faced with the performance review process stemmed from the fact that it is annual. A year is a very long time in the life of a startup, and managers find it very difficult to remember the specific work of each team member from 6+ months prior. This inevitably leads to recency bias in the reviews.
   At the same time, the annual approach means that team members go 12 months between each of their reviews. While good managers should always be providing feedback, the lack of a structured review process limits opportunities to make major course corrections.

2. Limited Direction: The annual performance review process used for the last two years has also been limited to a single downward review in which managers review their team members. There has been no structured channel for employees to review their managers.
   As a result, managers receive feedback from those who manage them, but not from those they manage— those best positioned to provide actionable feedback on their most important responsibility.

3. Limited Employee Participation: The downward review format also limits the opportunity for employees to participate in the process; to make themselves heard and take true accountability for their performance. While managers are expected to meet with each of their employees to hear their self-assessments  and ideas for improvement, all the actual work of doing performance reviews falls to managers.
   This represents a considerable amount of work, and reduces employee incentive to take a proactive approach to performance.

The New Process!

In the spirit of continuous process improvement, several changes have been made to how performance reviews will be done in 2025, with attention and action required of all employees, not just managers!

1. Quarterly Self Reviews: to ensure that employees are all held continuously accountable for reflecting, reporting, and improving on their OKR, they will now be responsible for quarterly self reviews. This means that employees, not their managers, will be required to review their own numbers against their OKRs at the end of each quarter, to provide commentary, and then discuss the same with their managers. This will include a Q4 self review completed at the end of December before the holiday break. The Performance Management module has a “Self-Review” feature that will be used for this.
   
2. Bi-Annual Upward Reviews: to ensure that managers are also held accountable and given the opportunity to improve, an upward review will also be conducted every two quarters. In addition to their Q2 and Q4 self reviews, all employees will receive an upward review through which to assess the management performance of their boss. The Performance Management module has an “Upward-Review” feature that will be used for this.

3. Annual Downward Values Review: to ensure that our performance is reviewed through a qualitative lens, we will continue to conduct an annual downward review each January. However, this will no longer contain each employee's OKRs from over the course of the year. It is expected that those will already have been thoughtfully updated and reviewed at the end of each quarter via the self reviews. The annual downward review will be more of a cumulative and qualitative assessment of those results, asking managers to look at each employee’s overall embodiment and alignment with Workpay’s core values over the course of the year. Managers will have the benefit of all four quarterly self reviews to refer to, helping alleviate recency bias.

Addition Area for Improvement: Setting Good Goals

In addition to lessons learned about the performance review feature and process, the People Team found that improved training is likely required on how to set meaningful, SMART goals. On most teams and at every level of seniority, two common problems seem to persist with how Key Results are set.

1. Confusing activities and results: it was common to find Key Results that were not in fact measuring results at all, but rather basic activities, such as “complete a training”. Training is important, and teams are encouraged and facilitated to undertake them regularly. However, the key thing to measure in terms of performance is not whether or not the training was done, but whether things improved as a result! Taking training on lead generation, for example, is not a result. The result would hopefully be an increase in leads generated thereafter!
   Training is just one example, but there are many other similar confusions between other activities and results. One way to test if your goal is an activity rather than a result is to ask yourself if you are measuring the doing of something versus the achieving of something. If the former, as yourself “why is it important to do this thing”, and the answer will likely reveal what the result you want to measure is

2. Forgetting SMART: another common problem is the setting of goals that are not specific and measurable. This is harder for some roles than others, and requires careful thought when writing out goals. Such goals usually use vague verbs, like “improve” or “learn”. If you find yourself writing out such a goal, as yourself, “how will I know if I’ve improved or learned?” The answer should help you refine your goal

If you find the above two distinctions confusing and difficult, don’t worry, you’re not alone! This is a common problem, and the People Team is committed to helping all employees get better at goal setting. 

Goal setting is an important professional skill for us all. When refined, this skill allows us to better challenge and assess ourselves, which in turn helps us grow and improve ourselves. So, stay tuned. Training is coming!