How Google does performance management

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In the early 2000s, Google adopted an innovative internal employee review system known as Objectives and Key Results (OKRs).

Now, Google’s senior vice president of People Operations Laszlo Bock has unveiled the details of the company’s HR strategies in a new book, Work Rules!.

According to Business Insider, Bock’s book details that employees set a goal for themselves and outline a series of measurable results that will help them achieve the objective.
Google’s CEO reportedly does this for the entire company.

The OKRs are the first step in the tech giant’s performance management process, and are followed by several key components.

Measuring performance

Google managers rate their employees on a five point scale, which ranges from ‘needs improvement’ to ‘superb’.

Peer feedback

Employees and their managers select a group of peer reviewers – this group must also include employees who are junior to them.

Peer reviewers list one thing that the employee should do more of and one thing that they could do differently to have a greater impact on Google.

Calibrating

Groups of managers engage in meetings to review all their staff members’ ratings together. This is designed to reduce managers’ bias, as managers explain their decisions to one another.

At the beginning of these meetings, managers are given a list of potential biases, such as the ‘recency effect’ – a tendency to disproportionately value an employee’s most recent behaviours.

Pay discussions are separated from annual reviews

Google conducts all annual reviews in November, while talks about pay occur around a month later.

This is designed to complement Google’s hope that employees want to improve their performance for the sake of contributing to the company, as opposed to doing so only to increase their salary.

According to Bock, research indicates that employees perform better in the absence of incentives such as more money.

He adds that employees at Google want to be evaluated because they wish to grow and ultimately become the best at what they do.

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