Performance Reviews are dead! What’s next?

Trends in HR

If you work in HR you’ve probably seen some of these headlines the past couple of years:  “The death of performance reviews”, “HR needs a revolution”. There’s certainly a new buzz topic out there, but how much should you listen to it and what should you do?

I’m always cautious about getting lost in the buzz, so at Spotify we try to watch the developments around a topic before following the trend. But most importantly, we always start with our own people strategy, company culture and DIBB’s framework when making a change to our approach.

We also pressure test and think about the consequences – what does it mean for the business? We don’t let ourselves get wrapped up in the focus on what we shouldn’t do, but instead think about making adjustments. We identify a concrete benchmark on what’s next. For example, with this current trend, there’s a lot of opinion out there telling us what to avoid and a lot of them are spoon fed from companies that have a new app or process that will solve the new way of working. When you scratch the surface it’s not that simple and still not very concrete on what should we be doing instead of performance reviews, ratings and other heavy processes.

Performance Development at Spotify

We believe in Performance AND Development since you can’t really separate the two. Also having leaders telling the truth about performance so you are able to develop. So we combine looking at performance, to see what is needed for the company to reach it’s goals, and looking at the development of our people. Read more in the recent blog post from my colleague Johanna.

However, when we launched this approach at Spotify, the most frequently asked question from managers and peers was: “How shall we assess performance and calibrate across the business?” This was a real challenge that we needed to address – especially in a business environment that relies so much on data. This is why we created four pillars of our approach:

  1. Continuous planning & 1:1 meetings
  2. Development talks
  3. Talent snapshot
  4. Compensation review

Introducing the Talent Snapshot

For now I’ll focus on explaining the talent snapshot.

Our performance development beliefs are designed to support, encourage, challenge and develop good leadership. It’s not about control, demand or tick boxes. Being a leader at Spotify means having a responsibility to assess and grow your teams. There’s a very clear expectation on our leaders to be in touch with how their team members are performing and what their aspirations are.

When it comes to assessing employees and the team’s performance, we saw a need to help our leaders trigger more structured conversations on this all with the purpose to enable people growth. Enter the talent snapshot.

It’s exactly what it sounds like – a snapshot to see how the team is doing today. And it’s an opportunity for sharing experiences with peers (manager-to-manager knowledge sharing).

Why the talent snapshot?

Since we wholeheartedly believe in a growth mindset, we recognise that individuals will grow with Spotify, and that circumstances will change. Performance ratings can trigger a fixed mindset, and often mean getting stuck in one place for a year, or sometimes longer.

It’s the same as with grades in school. I still remember my teacher in mid-school saying that I don’t have a talent for mathematics. That triggered my fixed mindset and I had to fight hard to get away from. Perhaps she was right that I should not aim for a PhD in mathematics but with this fixed mindset I limited my potential. We should all be aware of our strengths and gaps, but we all benefit from striving for a growth mindset in any area that’s important to us. I’m sure many of us have similar stories.

Nowadays, I look at performance ratings in the same way. That’s why we introduced a snapshot. It’s a way of looking at where the team is now, but not holding them there. The snapshot makes us consider where the team can go and how both the individuals and the team can develop. If the leader can understand the growth potential for all the individuals within the team, they can better visualise how the team can evolve together.

How to work with the talent snapshot

With a growth mindset as the backdrop I normally open up a talent snapshot workshop explaining the goal in these three bullets:

  • To leave the session as better leaders with more confidence.
  • To set concrete actions on how to further grow your team.
  • To gain a better understanding and alignment of the team’s strengths and gaps.

The workshop is designed to be held with or without HR support and the toolkit is available for everyone. We focus on the actions and the conversation. The model that guides the conversation is as follows:

The real potential for a team to accelerate their performance is when the employees in the yellow circle move toward the right. The idea is that when you can apply a growth mindset, you can help the whole team take a step to the right, following the direction of the arrow. A common pitfall in this exercise is to get stuck focussing on those individuals falling into the red or green circles. The ones in red you are normally already working with. The ones in green you have to make sure they are challenged and happy. These ‘outliers’ should not be ignored, but focusing on concrete actions for growth for the ones in the yellow circle will have the biggest impact for the team.

Once the snapshot of where your team members fall is done, you should focus on action points to help the whole team move to the right. Here are a few examples of relevant action points:

  • Discussing the personal development plan more carefully – ensure the employee is driving their development if unsure about a team member’s development plans and aspirations.
  • Giving recognition – the types of things that motivate each team member can vary, but this is a great time to consider the impact of public recognition.
  • Concrete discussion on the next career step – perfect if you can identify a team member as having high potential, but they’ve been in same role for more than 2 years.

Most importantly though, the purpose of the talent snapshot is the discussion during the workshop that leads to realisations and impactful actions. It’s not so much about the exact placement of each of the each team members on this model. This is simply a framework to facilitate the discussion.

So what to do if you spot a new trend in HR?

If you’re deciding on whether to take notice of a new trend I’d advise distancing yourself from the buzz and do not panic. Go back to your culture and beliefs. Let that steer you when designing tools and processes you need.

It might be that you end up driving an approach where the need to be groundbreaking and revolutionary is secondary. Your chosen approach may even be considered by the harshest critics as old-school and untrendy. But that’s ok – do it your way, with a thought-out approach that will support managers, who in turn can focus on getting the best out of their teams, and helping individuals develop.

This is our way. Is it perfect? Do all managers get on board in the way we would hope? No, of course not, but we are convinced that if we as a HR team stay close to our beliefs, be persistent and keep on challenging ourselves and stakeholders, in the long run it will have the biggest impact on the business.

Thank you for reading this far and happy for any feedback for my personal growth.

*Data Insights Beliefs & Bets.