The topic of today’s topic is: How can leaders achieve clear rewards and punishments in performance appraisals? The author is Xiao Jun, CTO of Suning Jinke
If you want to make rewards and punishments clear, you need to first clarify: who did what, based on what quantitative indicators and rules, and what rights or penalties they received.
Technical assessment is difficult to implement for three reasons
- Difficulty finding key metrics
- Team members have difficulty assigning performance weights
- Assessment results are difficult to apply
Difficulty finding key metrics
I have thought about this indicator seriously before, and it is difficult to find a completely numerically measurable indicator. For example, the amount of code, the number of production failures, business demand response time, business complaint rate, project delivery cycle, etc. These are result-oriented KPIs, which will cause employees to behave differently during execution. The indicators of technical employees are more suitable for guiding indicators such as OKR.
Team members have difficulty assigning performance weights
The performance weight here refers more to the quotas for merit evaluation. In many companies, quotas are fixed. How do you allocate them to people in different projects and positions?
Assessment results are difficult to apply
Is the assessment based entirely on quantitative KPIs, or can it be modified subjectively? What if a core employee who specializes in innovation needs to be severely punished because of failure in innovation and resigns?
Based on the above three types of issues, Xiao Jun developed a special performance appraisal plan, which is mainly divided into four stages. I will briefly introduce it here, and those who are interested can read the full text.
1. Decode the strategy, formulate the basic performance of the large team, and refine the North Star indicators.
There are two basic principles here. First, team performance determines the ceiling of individual performance and also determines the ceiling of rewards and punishments; second, the design of the performance framework must be consistent with the strategy.
Performance Appraisal = (Performance Indicator + Values Appraisal Indicator) × Playing Style + Team Building Indicator
North star indicator = 2 performance indicators + 1 team building indicator + 1 values assessment indicator
You may need to think about how to use these two formulas.
I used to think about a question when formulating the assessment rules, that is, whether to assess performance indicators, that is, income and the like. After thinking about it later, I still think I should add it. No matter how good the technology is, if the company is not making money, there is still a problem. For example, the technology has achieved very good performance indicators, but the actual business volume has not increased at all. This is actually a waste of the company's R&D resources and has not used them on more important things.
Value indicators are what the company wants employees to do. For example, the company hopes employees can take the initiative to solve problems. Then we need to break down proactive problem solving into several measurable indicators. When evaluating, I think subjective judgment + case proof is a better way.
2. Team consensus determines individual global differentiation indicators.
Develop differentiated assessment indicators for each person based on specific business.
I have thought about this issue before, but in the end I chose not to do differentiated assessment. The reason lies in the difficulty of execution. How to define the assessment standards for each person? This is a hassle. Another reason is that if your company originally wants the strong to become stronger, then unified standards will give employees more expectations.
3. Performance data presentation and interviews.
The indicator data is displayed through quarterly reports and weekly reports and sent to everyone, so that basically before the assessment, everyone can roughly see who is doing well and who is not doing well. In order to ensure the relative objectivity of the assessment, we adopt the 1+2+X model, which is 1 HRBP + your supervisor and your supervisor's supervisor + the employee himself. HRBP has 1 copy of data, the supervisor also has 1 copy of data, and the employees themselves will also have 1 copy of data (employees enter it into the system themselves, using the model of self-evaluation + speech cases)
My own experience is that some performance appraisal indicators need to be confirmed as soon as possible in daily life. For example, our company used to hold morning meetings every day to disclose these things. For example, this week xxx took the initiative to deploy and test a key node of a key project in advance.
4. Application tracking and strategic review of reward and punishment results.
First, identify rewards and punishments and track how the results are applied. At that time, we adopted the "12331" mechanism. The first "12" is defined as excellent, the "1" in the "12" is excellent+, the middle "3" means the performance is in line with expectations, and the last "31" is a large pool for optimization and adjustment. . In this way, the teams will be sorted according to the "12331" method, and the evaluation, bonuses and promotions will be based on this rule.
Secondly, we need to conduct a strategic review.
The assessment I designed before did not take the number of people into consideration, which is equivalent to rewarding you as long as you do well. All are the same. If there are a lot of people meeting the target, the company should be happy. If the assessment indicators are set unreasonably, then change the indicators. I personally don’t like forced elimination, at least in small companies (within 20 people) I don’t think it’s necessary.
Finally, to summarize, there are two core elements of performance appraisal.
- The performance of the team must be linked to the company's business, and the performance of the team determines the ceiling of individual performance.
- The purpose of assessment is not to punish, but to solve problems. Reward those who solve problems with incentives.