Our company is in the middle of creating a new interdisciplinary team. Our boss for the interdisciplinary team is planning to restructure the way People are being promoted/paid. He does not want to be the sole decision maker to determine the pay, because "the loud people get more".

He wants to measure individual performance by co-workers so that career paths are democratized. I get were he is coming from. However, I think this can go wrong in many, many ways. I have voiced my concerns about the ways these things can go wrong. I found and read a lot of literature that outlines how performance measures can be done (or go wrong).I was able to convince him to at least consider other parameters than "does a lot of Overtime". Yet, me (and him) cannot find any principled guides that outlines some procedure with which one can develop a plan to link performance to pay. I found some ways to:

  • develop some sensible performance indicators (with ProMES)
  • ways to control the process from becoming too complicated

But I am at a loss about how to link Performance indicators to career paths or pay. What principled ways are there?

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    "I think this can go wrong in many, many ways" - Yes. – dwizum Mar 29 '19 at 15:28
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    It is reasonable to expect any competent manager to be able to make judgement on their team's performance. This cannot, for reasons of fairness or any other, be reduced to an algorithm nor anything else that can be trivially gamed. This approach is doomed, for certain. – BittermanAndy Mar 29 '19 at 15:41
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    @sf02 I am a UX Researcher who happens to have some psychological Training. I more or less slipped into this debate by voicing my concerns. Now, since I opened my mouth I have to present some alternative that may be acceppted. (A simple "just go by years of experience" Approach was not "innovative enough" to them) – user105833 Mar 29 '19 at 15:41
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    @Jonast92 Thanks for the Suggestion, I just had a look. However, the author seems to "shoot from the hip". Sentences like "I came up with the Concept of promotional Tiers" are a poor counterweight to the Sources that empirically Claim that many such approaches motivate employees in exactly the wrong ways. – user105833 Mar 29 '19 at 15:48
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    Measuring performance by "does a lot of Overtime" is wrong on so many levels. Overtime is good in certain situations but if one does a lot of overtime, that usually indicates a deeper issue. – Anonymous Mar 29 '19 at 15:58

This depends a lot on the disciplines you are working in. For example, this could go very wrong in sales, because one person might be "selling ice to eskimos", as it were, while another might be selling the same ice to the Sahara; by performance metrics the second person would get a promotion, but really they just had an easier job. Make sure whatever metrics you are tracking make sense to be uniform across the team, or at least weighted appropriately.

If you would like co-workers to measure other co-workers' performance, be careful of office politics. If, for example, person A always plays ping-pong with people B, C, and D, and person E does not, then necessarily you should expect A, B, C, and D to all speak better of each other than they speak of E. This has nothing to do with work performance. Take co-workers' opinions into account, but make sure to weigh them properly. Also, it would probably be a bad idea to let the team know this was happening; if they know how their feedback is being used, they can act appropriately, even to the point of completely fabricating stories (good or bad!) that fit a certain agenda.

  • Actually sales is the one place where its most frequently used- commissions are very much this sort of plan – Gabe Sechan Mar 30 '19 at 9:25
  • In software development, you would give the hardest problems to the best developer, who will therefore solve fewer problems than the least good developer who only gets the really easy problems. – gnasher729 Mar 31 '19 at 16:18

I think it is very hard to gauge performance in a completely fair manner across a company. Problems will always occur.

My suggestion would track things like:

  • number of deliveries
  • commitments assumed and completed
  • quality of such deliveries (rate of bugs may denote rushed deliveries)
  • documentation written
  • mentoring of others
  • trainings given
  • ownership of the product / project (basically, doing more than following orders)
  • adherence to the companies culture

if you are thinking in adopting peer performance review, please do it both ways: ask peers to evaluate their peers and their leadership, because not only the teams need to be evaluated, the leaders (line managers, project managers, etc) also need evaluation.

  • +1 because I agree with the gist of this. However, in practice, these are hard to quantify and 'number of deliveries' is actually bad if it doesn't take task size/difficulty into account. I guess you could come up with a point system or something. – Llewellyn Mar 29 '19 at 19:56
  • I really like the supporting nature of the measures. I had something similar in mind with a system that punishes not people who fail, but people who fail to help or ask for help. However, how do I go about linking these measures to some increase in salary or position? – user105833 Mar 30 '19 at 9:14
  • The problem is all of these are really varied. Number of deliverables? I'm working on one really hard one. Number of commitments? Same. Number completed? Maybe company direction shifted, or we decided an idea was technically infeasible. Quality? How do you measure that? Number of bugs? What if I'm on the most difficult part of the code? What if I took over a project built on shitty code? Mentoring- I actually have no juniors on my team. etc. I understand the desire for metrics, I just don't think any good ones actually exist. – Gabe Sechan Mar 30 '19 at 9:30
  • @GabeSechan, I agree with you. 5 years ago I would completely recommend to not use them, and rather judge performance in an individual level. The problem with the individual approach is that it becomes subjective, instead of relying in facts, which has its own shortcomings, like bias, favoritism, etc. Today I would try to have a set of guidelines, depending on project, product, environment, etc, to provide some kind of fact-base evaluation, since evaluation has to occur somehow. But, as JoeStrazzere said, this can lead to a gamification of the system, not necessarily in favor of the company. – Quaestor Lucem Apr 1 '19 at 8:33

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