#Performance reviews

Create a 'Culture of Care'

Founder Truett Cathy set out to build a company culture where staff genuinely care for each other and put other's needs ahead of their own. But a culture like this can only flourish when "it is backed up by authentic sentiment, reinforced through action, and strengthened over time." Some key ways that Chick-fil-a fosters their Culture of Care is to:

• Inspire care through words. Leaders greet each staff member every morning with a warm hello and can spend entire one-on-one sessions discussing any problems their staff are having.
• Set an example of care through actions. After lunch, the CEO and leaders can be found clearing the staff's dishes in the cafeteria. They also make their departures very public when leaving early for family events to set a tone of work-life flexibility.
• Spread the tools for care through training. Every corporate leader goes through a two-year training program to understand the foundations of servant leadership.
• Reinforce an expectation of care through evaluations. All staff are evaluated on how they embody the company's core values during bi-annual evaluations and monthly check-ins with their manager.

Pay unfairly

Google knows from experience that two people doing the same work can make drastic differences in impact. For this reason, compensation is determined by impact—not tenure or title. This results in higher performing employees receiving much larger bonuses than less impactful employees.

However, to avoid a culture of jealousy and resentment, Google ensures that impact is measureable and employees have a clear understanding of ways they can improve. In order to do this, managers:

• Set clear objectives with measurable results for each job role
• Provide regular check-ins to give staff an understanding of where they are in their progress
• Have staff fill out self-assessments each year
• Have peers provide 360-degree feedback on the employee's strengths, weaknesses, and contributions to specific projects

Managers then hand over this data to a committee to make the final decision on compensation. By using committees, Google has found that this helps to avoid bias and also removes any frustration being targeted directly at the manager by underperforming employees.

Have staff give feedback to their managers

At Google, employees provide feedback to their managers on a semi-annual basis through an anonymous survey called the Upward Feedback Survey. The questions were developed using data from annual surveys and performance evaluations that helped Google define the 10 behaviors that made quality managers.

The aggregated results are shared with the manager and managers are then encouraged to:

• Choose the most important theme and create an action plan on ways to improve
• Discuss the results and action plan with the team
• Follow up with clear commitments to action

The goal of the survey is not to directly impact a manager's performance rating or compensation, but to provide them with valuable developmental feedback.

Give feedback all year round using stop, start, continue

At Netflix, gone are the days of a manager reviewing employees once a year on a scale of 1 to 5. Let's face it, how good can you be at giving feedback if you only do it once a year? Instead, at Netflix, anyone at anytime can provide feedback to anyone else (managers, executives, and colleagues) in the form of start, stop, continue.

It works like this. Each person tells a colleague:

• One thing they should start doing,
• One thing they should stop doing, and;
• One thing they're doing really well and should keep doing.

Generally, each employee provides feedback to thirty to forty people each year. Netflix even holds in-person speed-feedback sessions with groups of 8 to 60 people. They also have feedback dinners once a year where each person receives feedback from everyone else at the table.

Provide candid feedback using the 4A guidelines

Netflix spends a lot of time coaching employees on how to give and take feedback effectively by using their 4A guidelines.

When giving feedback:

• Aim to assist: Give feedback with positive intent and never with the intention to hurt or embarrass someone. Don't say: “Picking your teeth in meetings with external partners is irritating." Instead say “If you stop picking your teeth in external partner meetings, the partners are more likely to see you as professional, and we’re more likely to build a strong relationship.”
• Actionable: Focus on what the person can do differently. Don't say "Your meetings aren't collaborative." Instead say, "During our meetings, you often talk more than half of the time. This is preventing other members from having the time they need to give their opinions.”

When receiving feedback:

• Appreciate: Fight the natural reaction to become defensive. Instead listen with an open mind and say "thank you" with sincerity.
• Accept or discard: Listen and consider all feedback but you decide whether to follow it or not.

Stop performance improvement plans (PIPs) and instead give adequate performance a generous severance

Netflix feels that PIPs are not only cruel, because they're really all about proving incompetence, but they are also expensive:

• You pay underperformers for several months.
• You spend a lot of time and resources documenting the process.
• The time spent training only gets adequate performance up to speed for what you need now, not six months from now.

To keep a high talent density, Netflix instead focuses its culture on proactively letting people go. Why keep a good employee when you need a great one? Adequate performance instead receives at least four months of severance, that is, only after they sign an agreement not to sue.

And if you're wondering, involuntary turnover rate is 8% (only 2% higher than the US average).

Take the keeper test, constantly

There are no rankings, bell curves, or rules to "cut the bottom 10% every year” at Netflix. Instead they have the keeper test used by everyone in the company, even the Board of Directors.

For managers or the Board, the test is somewhat simple:
If someone on your team quit tomorrow, would you try to change their mind or accept their resignation with a sense of relief? If you're not willing to fight for the person, it's time to say goodbye and look for a star performer.

For employees, it's still simple but a little scarier:
For your next one-on-one meeting with your manager, ask this: If I were looking to leave the company, how hard would you work to change my mind? The answer may be hard to hear, but at least you now know where you stand.

Grade performance with a quality control checklist

At The Ritz-Carlton, for every four housekeepers, there is one person who spot checks their work against a quality control checklist. Scores are determined on a 100 point scale and anything below a 95% is considered below standard and requires a follow-up with the housekeeper to review what went wrong.

Measure service with Net Promoter Score (NPS)

After any order or after certain customer interactions, Zappos sends out email surveys to these customers in order to help calculate their Net Promoter Score and learn more about the experiences the customers received. Questions have included:

• On a scale of 0 to 10, 10 being the highest score, how likely are you to recommend Zappos to a friend or a family member?
• If you had to name one thing that we could improve upon, what would that be?
• During your last interaction with us, you contacted a member of our Customer Loyalty Team. On a scale of 0 to 10, if you had your own company that was focused upon service, how likely would you be to hire this person to work for you?
• Overall, would you describe the service you received from [team member name] as good, bad, or fantastic?
• What exactly stood out as being good or bad about this service?

Results are then calculated each day and shared with the entire company. Each team member also receives their own individual scores for the calls they specifically handled.

Share WOW stories by soliciting customer feedback

As part of the Sharing Great Calls program at Zappos, team members are encouraged to let their leaders know when they have made a strong personal connection with customers. The leader will then email or call the customer directly to receive additional feedback on the experience.

Zappos receives over 100 Sharing Great Calls examples every week and posts them on the company intranet and also uses them for quality feedback and training purposes.

And in case you're not sure how to approach a customer for feedback, the Zappos message sounds something like this:

"Our Team Member said what a great time she had talking to you! We want to give our Team Members an extra pat on the back, so I have a huge favor to ask of you. It will not take much of your time, but it will help us enormously. Please tell us about the service you received and any points of feedback regarding the conversation you had with our Team Member. "

Review and grade phone calls with employees frequently

At least once a month, a customer loyalty team leader will pull a list of recent calls and have a team member choose which recordings to review. The calls are then graded on a 100-point scale using the Happiness Experience Form which breaks down a call into several parts:

• Greeting: Did the team member introduce himself by name, use the Zappos tone of voice, and genuinely offer help?
• Personal emotional connection: Was the team member helpful, patient, and sincere? Did he try to engage in conversation with the customer at least twice? And, did he keep the rapport going after the customer responded to his attempts?
• Service: Did the team member provide multiple solutions to the customer's need? How well was the customer need satisfied and did she have an opportunity to address any unstated needs?
• Seeking and supplying information: Did the team member provide the correct information and solution to the customer?
• Conclusion: Was the full order reviewed? Did the team member make an effort to WOW the customer with any perks? Did she invite the customer into an ongoing relationship with Zappos?

Zapponians are expected to maintain at least a 50-point average and are given additional training if their averages start to slip.