My notes for the Stack Summit panel on Performance Management

I was recently on a panel at Stacklist’s Stack Summit.  Topic was Performance Management.  We were given the questions a few days in advance, and I jotted notes down.  They are below.

What’s the measure of a good manager? How do you evaluate yourselves?

→ The health of their team — health = productivity + professional fulfillment.  Productivity you can gauge by the outcomes: completing or overachieving goals, and professional fulfillment:  whether the team members feel like they are learning, growing, getting better. The first is measured through a system of goals/OKRs and the second through surveying.  

One additional measure is efficiency.  That is, how well, or how elegantly can we get our goals done. Is it a slog but we get it done? Or is it well-executed, well-planned?  I haven’t quite figured out how best to gauge this yet.

I don’t think I’m such a great manager, but I evaluate myself by seeing how my team members grow within the company, when they leave, and whether they want to stay in touch afterwards.  I’m not an easy person to please and I feel like everyone that has worked under me has gone to do much better things as a result.

How would you describe the framework for performance management at your respective companies? 

I think performance management frameworks have to fit the size and maturity of the company it is serving.  At my current company, we’re only now 90 people, with about 20 people managers, most of whom are new to management and relatively new to the working world.

So, given that, we created a transparent expectations framework that is cross-functional and outlines what we expect for Thought Leadership, People, Results Orientation, and what I call Self Leadership.  This is about EQ, knowing oneself, curiosity, handling ambiguity, etc. This enables our newer and seasoned managers to be calibrated in how they think about performance.

We also have a company- and functional goals process that sets stretch goals.  This is still in the early stages but it’s going well and keeping everyone at the company aligned against our company objectives.

At the engineering level, there is some kind of sprint reporting/storypoints tracking, but it’s not yet a rigorous part of our performance management framework.

Sue, what is the role of managers vs. the HR department?

I think your question is, what’s the role of managers versus the People team as it relates to performance management?  If that’s it, then I’d say People — specifically me, in collaboration with our Leadership Team — help define the standards we expect across our organization, what “great” performance looks like versus “good”, what advancement looks like, how promotions are determined, etc. — and managers execute that plan.  And the People team needs to ensure that managers have the tools and training and knowledge to execute that plan, through information sessions, training, etc.  

Tell us about the tactics. How do you conduct reviews? What is the cadence of 1:1s, feedback, check-ins? What tools do you find particularly useful? 

We started conducting reviews at my current company when we were only 15 people, back in Dec 2017.  It was a little rudimentary then, based on the observations and standards of the cofounders.  Since then, we’ve implemented semiannual performance reviews with the expectation framework and our company Values.  

The reviews are your classic 360:  self, peer, manager effectiveness (or ‘upward’), and then all of that is taken by the manager, synthesized with their own perspectives and against our expectations.  I think it’s as lightweight as it can be without being useless, and we don’t get a lot of complaints, even from managers who have a lot of reports. We use Google Forms and emails for now, although will look to change tools by year-end since we’ll be hitting >100.

We also conduct a calibration session at Leadership Team.

In addition, it’s standard practice at my company for managers and directs to hold weekly or biweekly 1:1s.  We advise managers and reports to dedicate time to discussing feedback at those 1:1s, and our Engineers are particularly good at that.  I can’t say the same necessarily for other functions, candidly, because I’m not as close to that.  

That being said, all of this is meant to measure productivity and professional fulfillment, and our latest engagement survey, from last month, showed that 87% of our team said that over the past 6 months they’ve had opportunities to learn and grow, and 83% are excited about their upcoming opportunities.  And 80% of our staff rated their managers as Always or Often for “giving actionable feedback”. So something is working!

Honestly, I’m pretty cheap when it comes to tools.  Especially when we’re so early and have to be cost-conscious.  My favorite tool is Google Forms.

Are there practices or leadership priorities outside of direct management that help create a culture and environment where everyone on the team performs at their best? 

Yes.  We have values and norms that shape how we treat each other, how the office will support people’s productivity.  E.g., WFH, flexible hours, etc.

One thing that I’m still trying to sort out is how much structure people need to feel good about their work.  This can vary from person to person, but I’m coming to believe that things like job descriptions, scoping, and career ladders provide comfort that enables people to function better.  They don’t have to spend time worrying that they aren’t doing their job, or are stepping on toes.  

How do you each manage your direct reports? How prescriptive are you in how performance management works at other levels of the organization? 

I create a quarterly People team workplan that is associated with the goals/OKRs, and then we divvy that work out depending on roles and responsibilities.  Things that are associated with talent acq go to the recruiter; things that are about workplace productivity go to the office coordinator; and things that are around general HR go to HR generalist.  I take on L&D, leadership development, organizational design, etc. It’s pretty loose, but I think everyone on my team knows exactly what they are expected to do and deliver.

RE: other levels or parts of the organization, I’m not that prescriptive in how people manage day-to-day, although I am a stickler for our company-wide performance expectations rubric when it comes to advancement.

The only thing I care a lot about is any perceived inequity or unfairness, if one team is not pulling their weight.  This is hard to gauge but can have a pretty negative impact on morale of other teams.

How do you handle situations where employees are underperforming? When do you know it’s time to let a person go?

When an employee is underperforming, we don’t immediately jump to performance plans.  We spend some time problem-solving to understand if it’s the environment, a time-bound issue, or something systemic that is resulting in poor performance.  Because we believe that our hiring methods are pretty sound, we explore whether there is something else going on.  Concurrently, I usually spend time with the manager to coach them to give direct and unambiguous feedback.  This is hard because obviously there are concerns about demotivating the employee even more, or potentially having to handle eruptions.  

It’s never easy to know exactly when to let someone go.  There is no magic answer. But I know when I get really pushy about it, and it’s when I see that an underperformer is affecting other employees’ morale, or their perception of the company as a fair place.  Before then, I think of it as the manager’s problem, and they have to contain it — if they choose to keep someone on their team, they have to shoulder the extra work or whatever it takes. But once it seeps beyond the manager’s domain, I will step in and get more involved.  

I’d also add there is another type of ‘underperformance’, especially at startups.  It’s when the company is scaling and the needs get larger, and the team you have isn’t the team you need.  Those are tough conversations to have because we’re balancing the startup’s implicit promise for growth with having to be pragmatic about what you need.  It’s a lot of conversations. A lot. We considered how Netflix purports to clarify their up or out model, but I’m worried about it leading to people having one foot out the door at any given time.  Loyalty is particularly important at the early stage of a startup, because shit goes wrong all of the time.

What experience do you have changing the role an employee has on your team? What are the right and wrong ways to go about this? 

We’ve had a few folks who have transitioned or grown roles.  As a new startup, there is a ton of opportunity and it’s kind of up to folks to find those and make something out of it.

My advice is this: Make sure you are changing roles for the right reason, not to ‘kick the can’.  In other words:

→ Do it for the employees who are growing and doing awesome.  We have some people like this — who identify work to do and start doing it and before you know it, they are running a new function.  This is the good way.

→ Don’t do it for employees who have stagnated, and who need your help to find a new role. Typically it requires more energy than it’s worth and others will wonder why you are holding onto someone who isn’t building/growing/creating value. It’s also worse for someone to stay in a role or at a company where they aren’t growing, versus leaving to join a new opportunity. Granted, it can be hard to tell if the role is the wrong fit, or if the person is the wrong fit, so spend some time thinking that through, but ultimately if you have limited bandwidth, you may have to move fast. 

We’re actually going to introduce a clearer ‘internal mobility’ process at my company this quarter to formalize this and make this more transparent.

Tell us about goal-setting in the early days. How do you decide what are the important goals when planning out the next few months and years of your startup? How do you decide on a specific timeframe to measure goals?

Gosh, in the early days, our goal was to launch our product by a certain date.  So that was pretty clear, and it was all hands on deck to get that going. After launch, the goal became growth — hitting certain cardmember numbers by a certain time, while also restraining credit losses.  Because our product was new to the market, we were testing our marketing tactics, our targets were largely swags, and they turned out to be a vast underestimation of what we would achieve. A good problem to have, but made me realize that when you are starting out with a new product that hasn’t been in the market, it’s very hard to know what the right targets are to hit. 

About 3-4 months after launch, we had much more clarity about what is achievable, how marketing impacts our numbers, etc.  And we wanted to promote more accountability and autonomy, so rolled out a goals and initiatives framework, which has morphed now into OKRs.  And how we decide what the company goals are is through the Leadership Team — we all go in with our ideas on what the key company priorities should be, debate them, put numbers around them based on finance’s projections, and settle on 3-5.  We have quarterly and annual goals, and will adjust as needed.

We’re still early-stage, so part of our targets are related to thinking about what venture capital investors are looking for, and making sure we are factoring in those metrics/trends as well.

Surely you experienced fairly regular change during the early days – from staff, to business model, to priorities. How did you manage your team through this? Does goal-setting take a different form when the company’s direction is more likely to be evolving?

Yes, my company literally becomes a different company every few months — we’ve moved offices 3 times in 15 months, and have grown by 5x.  The most obvious changes are the numbers of employees, but also the way we plan work has changed a lot.  

Honestly, when it comes to change, it’s all about communications, explaining the why.  When we were a handful of people, like 25, we would meet every other week to discuss what’s going on — changes, etc.  It was much easier; we were in a one room loft.

As we approached 50 people, we underwent a wholesale review of our communications practices and cadence, and made changes.  We meet weekly, go through metrics and launches, priorities, introduce new staff. We also send out more written comms, have dedicated Slack channels on team announcements, team metrics, etc.  On top of that, we’ve started pushing down goal-setting to the functions through the OKR process. And keep everyone on track through a weekly Alignment team meeting.

So…you may be thinking — golly, there are a lot of meetings and written stuff.  That’s true. And so we’re now undertaking a meeting efficiency initiative and thinking through how to reduce emails/slacks.  The upshot of all of this is:  be attuned to potential problems and get ahead of them before they slow you down.

Sue, how much does topic skillset matter in management? And what advice do you have on managing outside of your skillset? 

Management isn’t one size fits all.  I think one of the problems with early managers is that they want to delegate all the time, probably because they were great performers and like to be managed that way.  But that’s a mistake.

If you have someone who is a greenbean, you have to teach them everything, be directive, even micromanage.  So yeah, you have to know the topic. If you have someone who is seasoned and knows their stuff better than you do, your job is to coach, motivate, brainstorm with them when they need help, guide them outside of the topic area.  And if you have someone in-between, you can span between delegation and guiding — some knowledge sharing, some assignments, encouragement to learn on their own.

When you don’t have the expertise:  Ask good questions. Apply a beginner’s mind.  Have curiosity. Make sure they have the context and the information about what’s going on at the company.  You basically need to steer them, unlock their potential, keep them informed, motivate, but also brainstorm with them to help them think about issues in different ways.

Ultimately, as the manager, you’re responsible for your team’s success, so you better learn enough to be helpful.

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