From the inside: performance reviews
The internals of a core engineering management process and how to navigate it better.
Hi everyone!
It's Mateus here with the September edition of
. 👋🏻I must apologize for the delay in the September edition, but it was for a good reason: holidays. Now, it's time to get back to work and do some writing.
Last month, I received feedback from a colleague who had read a newsletter issue and mentioned that, while they liked it, they had some doubts about certain aspects that seemed a bit too "internal" from a management perspective. Consequently, they didn't fully understand it, as they were not in a managerial role.
This feedback inspired me to occasionally create posts within a series/tag/topic called "From the Inside," which are intended to provide clarity and transparency on these internal matters. I believe that this transparency also fosters empathy for good managers because it gives people insight into what goes on behind the scenes and helps them understand the challenges of management.
That said, the first post with this perspective will focus on a cyclic process that happens usually twice a year in companies that have a structure to support talent management and that I just completed last month in my current role: performance reviews.
We'll delve a bit into the structure of the process, as well as an often overlooked internal aspect called calibration, discussing the rationale behind it, its significance, and, hopefully, how it contributes to the outcomes of this whole process.
This painting is called The Funding Bill, by Eastman Johnson.
First things first: process overview
The performance review process is indeed a challenging task for a manager, demanding a substantial amount of time to be executed properly due to some thorough steps that need to be addressed.
The steps below represent the core of my experience doing performance reviews, with some variation here and there. Some of them are performed in collaboration either with my manager or other peer leaders from the same department/organisation and their order may vary depending on the context:
Initial assessment: my first unbiased point of view of each individual I manage during the period this process comprehends. I like to have this first clear review of not only what was delivered but also how it was: technical quality, peer interactions, and business impact are, for instance, some of the aspects I like to look at. I might miss one or two things here, but the next point helps me to be sure everything’s covered.
Comparison with the individual self-assessment: I always ask the people in my teams to think of their self-assessments from two perspectives - their accomplishments in the given timeframe, a reflection on what could’ve been better and one to three big things they’d like to focus on next. I also like to read these self-assessments before the next step to make it more productive.
1:1 convos and goal setting: the real talk. At least one hour of a deeper conversation over everything covered in the assessments above. Here it’s the space to give praise for what deserves praise, to properly adjust expectations on what needs improvement and to set room for growth where’s both wanted and needed. Usually, here I also do the kick-off of the goal setting for the next period.
Ratings draft: with both manager and self-assessments in hand, a rating draft can be assigned internally to an individual based on their current roles, responsibilities and review. These ratings are not yet shared with the employees immediately, as they go through a refinement process described below - the calibration.
Calibration rounds: we’ll talk a bit more about it below, but the main purpose of calibration is to ensure that ratings are evenly distributed within an organisation following some measurable parameters.
Final ratings and communication: after the calibration rounds are completed and my assessment is submitted, a merit statement is provided in a written manner and communicated alongside any other thing it might carry together, such as raises, bonuses, promotions or even the lack of them.
Context given, let’s focus on the calibration to try to understand: what it is, why it matters and where it impacts.
After all, what is a calibration?
The depth of detail required in performance reviews is not only a result of their complexity but also because they revolve around perceptions of fairness. Yet, the idea of fairness in this context is nuanced, as it hinges on the viewpoint being considered.
An individual may firmly believe they delivered exceptional performance, but their manager might have had limited visibility into their achievements for various reasons. On the other hand, the work could genuinely have been outstanding, but there may have been others who also excelled and set exceptionally high standards. That’s why it is safe to say that an employee’s performance review does not depend on their work alone. It also has important touchpoints such as peer interactions and how they were perceived from the outside, as well as how other peers have performed. And that’s where calibration comes into place.
Calibration is the process of having similar standards of comparison for individuals within the same organisation. It might have or not other incentives tied to it, such as rewards. In cases where it does have, it helps managers to distribute a limited amount of budget more fairly between an entire engineering organisation.
Preparation is key
A good manager should be aware of their team's achievements to share them and also be reasonable enough to recognise other teams’ accomplishments as well. That’s why managers must always prepare thoroughly. To play it well, it is fundamental to:
Know the baseline expectations for a given role/rating pair.
Match an individual accomplishments to this baseline in order to avoid moving a given rating.
Those two things will set the stage for how a manager can endorse his rating proposals for the calibration meetings, where other peer managers will be doing the same. These meetings will then proceed with many managers sharing their ratings with their peers to try to rate their teams fairly. Usually, there’s the manager of these managers who performs a “moderator” role to ensure that fairness is applied to an entire engineering org.
Here, focusing on what a manager can control is important: to know how the individuals performed, which business results they contributed to, and how they exceeded in their role within or outside of their teams. But what are the things that we cannot control?
Organisational policies: sometimes, there are things such as performance buckets where no more than a given percentage of employees is expected to be within a given performance rating. While there’s room for discussion on whether this is effective or not, it is usually a constraint that must be followed as an HR/management directive.
Resource constraints: such as a limited amount of budget to be used for rewards usually distributed within a perf review process.
Bias and subjectivity: other managers might be biased by the interactions they might have had with some individuals, and that can and should be enhanced but cannot totally removed.
Trying to fight hard against such things, even if they might seem unfair sometimes, will not only take a manager’s energy but probably deviate its focus from where it should be: their teams' accomplishments and effectively showcasing those achievements in the calibration forum.
Last but not least, it is important to say that in healthy organisations, calibration meetings should not be seen as a win-or-loose game. Managers should also be willing to acknowledge and appreciate the accomplishments of other teams. Being fair, objective, and recognising the efforts and successes of all teams within the organisation fosters a positive and collaborative work environment that contributes to the overall success of the organisation.
Expectations as two-way streets
Collective fairness sometimes harms the sense of individual fairness and meritocracy, and that’s why it is important that managers work beforehand on a common fairness perception. This fairness perception plays a pivotal role in performance review ratings and their shareout. An employee might receive a final rating of "meets expectations" despite having delivered outstanding work, and this can be influenced by numerous factors.
Another fundamental aspect to share is that a performance review rating does not define an individual. It's something that exceeds managers’ sphere of control. However, the employee’s personal growth is within the manager’s sphere of influence. Effective managers strive to recognise and reward their top-performing employees, advocating for their success. They surely fight the good fight ‘til the very end. Yet, there are factors that fall beyond control, and at times, compromises must be considered.
Thus, thinking long-term is key to navigating performance review processes. it's essential to understand that receiving an average final rating in a cycle does not negate an individual's growth and professional evolution. Once more, it's about focusing on what both managers and employees can control and focusing primarily on personal development and progress. After all, that’s one of our main responsibilities as managers: ensure people are contributing and growing.
Wrapping up
Performance reviews are not an easy task for a manager. They take time and carry a huge responsibility. Hopefully, this month’s edition helped shed some light on the internals of this time-consuming yet important process for the growth of engineering organisations, as well as how managers and employees can collaborate to reach a common understanding of a complicated but core part of the employees’ journey.
For managers, it is crucial to have a complete awareness of an individual's deliverables to provide them with a fair rating compared to their peers.
For employees, it is equally crucial to assist your managers by offering this visibility and to recognise that this corporate process is a part of the game, but is also a two-way street where managers and employees help each other to find the sweet spot between growth and recognition.
Thanks for reading, folks. I’m looking forward to seeing you next month for another issue! 👋🏻