How to marry the formal review process with a true culture of feedback
I’m not a believer in the recent trend of abolishing formal performance reviews in favor of continuous feedback. Although I do believe continuous feedback—in both directions—is a hallmark of a strong employee-manager relationship, I don’t think it should replace a written document. Done right, a formal written review is a summary of ongoing feedback conversations and a good place to outline development plans. If your company is growing quickly, it’s also unlikely that all managers are delivering continuous feedback. The written review process will catch those cases where not enough feedback is shared.
Alongside the written review process, you likely have a mechanism to assign employees a performance designation or rating and submit people for promotion to the next job level. If you don’t, I suggest you build one. When I talk to people at companies that don’t have formal performance reviews, I often find that promotion and performance rating processes are still taking place in some form (hello, quiet firing). They’re happening behind the scenes—often without the knowledge of the person being “reviewed.” If employees discover this is happening out of sight, it can undermine trust. Instead, your assessment and recognition processes should be transparent, and you should guard against them becoming political and ineffective.
To build trust in the performance assessment system, people need to know how they will be measured, that the measurement will be considered fairly, and how results will lead to recognition and reward (additional responsibility, promotions, or compensation increases). To do this, you need the following:
- A talent strategy—this could be as simple as “pay for performance,” i.e., performance-based compensation rewards
- Rubrics for how someone’s performance will be measured
- Agreement on how to assess results against those rubrics
- A program to capture performance feedback and promotion nominations via written and numeric assessment
- A clearly communicated process for calibrating performance assessments across teams so that individuals know there’s a system in place to equalize the treatment of people at the same level in the same role and more broadly for everyone at that level across the company
- Compensation philosophy and a means for the performance and promotion processes to feed into any compensation outcomes
Managers play a critical role in ensuring the process functions as it should and that the components of the review process are clearly communicated to and understood by direct reports. If you’ve managed and delivered feedback well throughout the year, there should be no surprises—you’re merely documenting the conversations you’ve already had with your direct report. Ideally, if they’re performing well, you’re also marking a moment that results in a formal reward like a promotion, a raise, or a cash bonus.
In my book, Scaling People, I devote one of the longest chapters to feedback and performance mechanisms. That’s no accident. Excellent management takes a lot of work. So does building the right set of systems to support managers and their reports in performing at their highest level. But it’s also some of the most rewarding work you’ll ever do.
During my move from Google to Stripe, I remember packing up some personal items from my desk and coming upon an envelope full of handwritten notes from people I’d managed over the years. I thought about recycling it, but I just couldn’t. This was the purest expression of my work.
Management touches people. If it’s successful, it affects their lives and trajectories for good. You never know when all the time you’ve put in to help someone be their best will pay off—but when it does, months or even years later, it can mean everything. Maybe to them, but definitely to you.
Claire Hughes Johnson is one of Forbes’ ‘Self-Made Women’ of 2022, who is known for her work as VP at Google and COO at Stripe. Her new book Scaling People is a practical and empathetic guide for being an effective leader and manager in a high-growth environment. Including actionable strategies for interviewing, navigating crises, and running a truly successful meeting, it reveals exactly how to build a company that’s set for long-term success. She also includes valuable tips for expanding your own career.