Fix Performance Reviews by Adding Friction

In our previous post, we referenced the 99u talk given by Steve Selzer from Airbnb about friction. He said we should be focusing on making the right things frictionless, and at the same time, design intentional moments of human interaction and collision. So, what does that look like inside of companies when applied to employees?  

Let's explore a common talent management process. For obvious reasons, all companies want their employees to be the best they can be. Yet, companies often make that goal cumbersome on the employee and the supervisor. It's made cumbersome through excess process

For instance, most folks loathe the performance review process. Why? Well, in an old-school way, a lot of places start by asking managers to rank employees. They rank so they can determine what rating to assign the employee. If you have a boss who is a good salesperson and can sell your goodness, then you get a good rank and rating. If not, well then welcome to the land of mediocrity.  

But why is a rating so important? It's needed for the compensation team to know how to distribute raises and bonuses. Still following? This process had good intentions. The intent was to make it easier for the manager to deliver the annual performance review. Which usually looks like this:  

●You sit down with leader 

●Leader tells you rating (if lucky you hear or read why) 

●Leader tells you new pay (and if you receive a bonus) 

●You sign the review and leave

If you have any questions about the raise or bonus, the leader can deflect to it being a result of the process. 

This is where the process actually removed friction for the manager. It became easier for the leader to blame the result on a process beyond their control. Great experience for the employee, right? Of course not. They feel helpless, undervalued, and dismissed. 



Thinking about each employee's performance and how to reward them is good friction. That conversation about effectiveness and pay is a collision that should actually happen, not be made easier. That stale process in the big older companies says, "hey managers, we don't trust you to get this right for your teams." It removes an important collision between the manager and employee impacting credibility. 

Ok, so you're a growing company and you're saying, "we need to think about how we reward and pay people. What do we do?" 

Do like Steve Selzer is doing for Airbnb and customer experience. Design your approach to performance management for: skill building, self-reflection, collisions, and confrontations. Build in friction, giving leaders empowerment and trust to make pay decisions. Also, build in the friction of how they must communicate their decisions to the employees. Some leaders are going to say they don't know how to do this. You'll need resources ready about fair pay decisions and having effective conversations.  

Yes, the stale old process of distributed ratings made transactional compensation easier. Yet, managers were not developing abilities to communicate, build trust, and inspire employees. Plus, the employees felt slighted. They deserve honest and transparent feedback. They deserve it often. And they deserve to know how they do their work helps or hurts their pay. 

The easiest fix to this example is to remove the ratings. Remove the process. Give managers a lump sum of the profits to distribute amongst their teams. Force the managers to articulate the pay distributions. 

Equip them to not hide behind a rating or an automated calculation. This is not easy, but it’s worth it. It will result in managers spending less time politicking for certain employees to be rewarded. Plus, it will make better overall leaders for your company. 

Design for friction or collisions that force people to think about the human-side of work. These intentional interactions will be good for the employee experience and your culture.  




Allen Weaver