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Number 24 - Gift or coal at an engineers sock?

Evaluation systems

It's often being said that people do not leave bad jobs, but bad managers. But this is only partly true: people also leave jobs with poor future prospects. Consequently a company that wants to retain its talent has to have an effective way to reward high performers and evaluate its staff, something even more important to tech companies where everything is constantly shifting and progressing.

But evaluations always rely on the evaluators; the managers. Where people come, results tend always to include biases and noise. The manager might be playing favourites, not be fully aware of the specific field of each employee, have different notions of performance or objective or could also be prone to having a bad (or good) day. Exactly because this tendency to bias and noise is a well known problem, companies have enlisted the help of, well, more noise and bias in the form of more than one evaluators. Most companies' performance evaluation policy includes multiple evaluators beyond the main manager in the form of colleagues, other managers or even the person being evaluated. The idea is that the odd biases and noise will sort of cancel each other out and result in a fairer evaluation.

However, the managers know of this multi-evaluator approach and they often use that knowledge to game the system. Its easy to imagine a manager ranking all his team members as 10/10 to secure promotions and higher salaries to all of them thus making them more popular or a manager that might want to avoid having that difficult conversation with specific team members. 

The problem of incentives is also known and a method has been established to address this too: the normal distribution. By normal distribution I mean that the boss of the manager gives clear instructions as to how many people can get a good "grade", how many can get a normal one and how many can get a bad "grade". The only thing that a manager can do is assign scores and we get a system that is more insulated against managers whims.

Relative evaluation systems like that solve a lot of problems but come with their own baggage as well. For starters, absurd situations might occur where even if all employees gave their best, their scores would not reflect this and the other way around. Furthermore, it leads to competitiveness among peers. Since it is no longer just the quality of your work but what matters instead is how your work stacks versus others and in that sense it can have toxic implications. It is thus my belief that there has to be a better system but I haven't still encountered or conceived of one. I would actually be thrilled to hear some proposals so go ahead and leave a comment if you can give a suggestion!

Until then, the normal distribution will reign supreme!

 



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