How Chargebee, a $3Bn SaaS Unicorn, Designed Its Performance Management System

Let’s learn from the experts. In this article, we dive deep into Chargebee’s performance management practices — from goals to reviews to rewards and policies

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min read

10 second summary

  • OKRs are an effective goal setting practice to build an effective  performance management system
  • A performance management system should focus on uncovering strengths as well as weaknesses
  • Written feedback constitutes an important part of performance management, which the leaders must guide the managers to undertake
  • An effective goal management system should focus on clearly communicating the top priorities
  • Having a contribution-driven rating scale over expectation-driven rating scale is important
  • It is important to de-link compensation and review conversations

Continuing our focus on performance management, we recently had a discussion with the Chargebee team to learn what performance management practices they followed to build a $3Bn SaaS unicorn. In our 3rd episode of The Talent Talks, we were thrilled to be joined by Rajaraman Santhanam, Co-Founder & COO and Lavanya Gopinath, Director, Ops, Chargebee. 

For those of you who aren’t aware of Chargebee’s name, it’s a financial services company that rose to unicorn status in record time. With 1300 employees and despite having a steady emphasis on high performance, Chargebee is known for its employee-centric people management practices. 

Let’s get into the details of how Chargebee creates a high performance culture all year round and see what we can adopt to scale faster.

Performance management system at Chargebee

What was the context when you designed your performance management system?

When we started in 2011, there were not a lot of startups and the biggest source of revenue was from Europe. Sitting in Chennai, India, the only way to acquire knowledge about selling to customers in Europe was by talking to people and learning. Thus, learning continuously and building a network to learn from became important, which overtime evolved into a culture of continuous learning. After 4-5 years, we decided to build the core values or tenets for Chargeebee, by gathering a lot of team members together and brainstorming on what values do they identify with Chargbee. Four core values came to the forefront, Curiosity, Customer Centricity, Empathy and Bias for Action. 

Four core values at Chargebee — Curiosity, Customer Centricity, Empathy and Bias for Action

Eventually, these have become the basis for how we operate across all verticals, including our  performance management system. 

What are the constituents of the performance management system at Chargebee?

With performance being at the center of the performance management system, we look at it from a team and an individual perspective. 

Components of team performance management system

  • Adopted the OKR framework about 2 years ago, which became the big rock for team performance within the performance management system
  • Each team has specific KPIs which add to their performance management

Components of individual performance management system

  • Created our own evolution of the OKR framework, which we call Individual OKRs or IOKRs, which is still evolving
  • IOKRs also bring in learning and development into setting goals at the individual level. 

Process of our performance management system

  • Annual performance rating, review conversations and a rating cycle 
  • Quarterly review conversations aligned to the quarterly goal setting cycle 
  • Bi-weekly one-on-one conversations, also focusing on review and feedback 

Thus, formal performance review as a part of our performance management system is annual in nature, but is supported organically by continuous interventions. 

Also Read: How to successfully run weekly, quarterly and annual OKR reviews

Philosophy of the performance management 

  • Focus on uncovering strengths to value team members for what they bring to the table and delegate work accordingly
  • Focus on weaknesses to understand the gaps and facilitate hiring for the skills gap
  • Strengths and weaknesses are uncovered by review and self reflection from team members on areas of non-clarity, knowledge sharing, etc. 

Recognition for performance at Chargebee

  • Focus on a culture of recognizing each other. Rolled out a program called Rewards by Bonusly which allows team members to celebrate those who help them become successful or achieve an accomplishment, i.e. celebrating help by others
  • Decentralized recognition efforts with flexibility for teams to decide which are the best and the right practices for effective recognition that they are most convinced about
  • Supported by other efforts like spot bonuses in the form of cash, eSOPs, etc.
Chargebee has decentralized recognition efforts with flexibility for teams to decide which are the best and the right practices for effective recognition that they are most convinced about

Also Read: How manager can help employees write a great self assessment

How can organizations drive a strengths based performance management culture?

We started by creating a culture of written feedback to identify strengths. Our focus towards strengths based performance management involves:

  • Giving feedback in writing, be it bi-weekly, quarterly or annually which becomes a frame of reference and the next feedback comes on top of that which enables everyone to reflect on their progress every now and then
  • Capturing 360 degree feedback in writing to identify behavioral patterns and to highlight strengths and areas of improvement
  • Adopting the right communication frameworks to share the feedback so others are able to receive it openly
  • Encouraging our team members to share feedback directly
  • Being specific in feedback that others can relate to and absorb and form action items 
  • Getting in the habit of sharing feedback 1-o-1 and in real time
To become a part of such conversations and learn from the top HR leaders directly, sign up for The Talent Tribe, the best online community for HR and talent management professionals

Goal management with OKRs at Chargebee

What is the context behind the goal management system chosen by Chargebee? 

We adopted the OKR framework as our goal management system about two years back. Our goal management system is based on the philosophy that we need to:

  • Focus on fewer things, but go deep into the focus items
  • Clearly communicate the top priorities for the organization
  • Reinforce the top priorities among team members

For instance, last year we acquired a few companies and our goal for this year is to unleash the multi-product motion by learning as much as possible about those companies to increase revenue from direct selling, cross selling and upselling. For Chargebee, the goal management system is essentially about clearly communicating the goals. 

How did you introduce and roll out OKRs at Chargebee?

Before adopting OKRs, teams used to set their own goals, which were not visible on a single dashboard and leaders used share goals, which was often conversational. However, in the growth phase, making the goals visible became really important to enable people to align and prioritize. Thus, we built the habit of setting goals quarterly and making them visible for everyone. This led to what we called the ‘Quarterly Commits’ and the idea was to keep them focused and visible to everybody. 

In the growth phase, making the goals visible became really important to enable people to align and prioritize. Thus, we built the habit of setting goals quarterly and making them visible for everyone

We put these Quarterly Commits on sheets, which facilitated visibility, gentle nudges, checking other’s commits, getting an understanding of what others are doing and how one can add value to prioritize one's own commits.  This set the stage for OKRs because they were simple, focused on big rocks with measurable outcomes. We started it as a pilot project for a few teams for a quarter and then finally rolled it out for the entire organization. 

How do you apply OKRs for goal setting and performance management system?

Today, the OKRs exist at three levels and focus on setting and reviewing.

Setting OKRs

  • Between october-november, there are a lot of conversations at the executive levels, focused on questions to craft the company OKRs. This is an annual exercise which is reviewed every quarter to ensure relevance. They are made visible to everyone by mid-december.
  • This gives the directional impetus to create quarterly priorities and OKRs at the functional level. The focus is also on alignment between functions to facilitate cross collaborations. Thus, there is a sharing of functional OKRs at a quarterly level. 

Reviewing OKRs

  • Organizational level reviews to gauge OKR progress happens on a monthly basis.
  • Within teams, it might be even more rigorous, which has been left for the teams to decide, depending upon what their key results are. Sometimes it makes sense to do it on a weekly basis, sometimes bi-weekly and sometimes monthly. 

Furthermore, on a quarterly basis, the CEO goes and shares progress, thoughts on where we are, as well as what we need to correct and what can be done better with an open presentation with the entire organization. Using a specific OKR tool provided a hierarchical view to help us understand what maps to what. 

On a quarterly basis, the CEO goes and shares progress, thoughts on where we are, as well as what we need to correct and what can be done better with an open presentation with the entire organization

How do organizational and team goals translate to individual goals at Chargebee?

It's a collaborative process. This also happens at the quarterly level

  • Once the team OKRs are set, the manager is able to give some level of visibility into the priority for the team. This enables the individuals to set their own development goals and their specific contribution goals to a team OKR. 
  • There is a specific conversation on the goal setting itself which works in tandem with the quarterly review and expectation setting cycle. 
  • There are inputs from the manager, but there is also an input from the individual which are captured in the IOKRs.
  • Focus is on asking a lot of questions in order to take a key result and make it really quantifiable to augment clarity. 
  • We emphasize on the importance of building the habit. While creating a goal setting system is not an easy task, we focus on building perseverance to adhere to it and breaking out of the inertia to build this as a habit and organization. 
  • We have evolved into the place where people have started thinking about clearly articulated outcomes as OKRs.  
  • To avoid the confusion of KPIs or KRAs, we decided to evolve with IOKRs. 
Without building a habit and knowledge about the OKRs, any efforts towards OKRs will not work out really well. Thus, it is important to invest time in the beginning to bring the knowledge level of OKRs up and build the habit for the first 2-3 quarters to break the inertia, post which stabilization and perseverance begins

Thus, OKRs start from the CEO and stop at the team level, while IOKRs are for all team members, individually. Building a habit and knowledge about the OKRs are extremely important and without handling these two, any efforts towards OKRs will not work out really well. Thus, it is important to invest time in the beginning to bring the knowledge level of OKRs up and build the habit for the first 2-3 quarters, post which stabilization begins. 

Performance review and assessment at Chargebee

What is the frequency of performance assessment for the performance management system?

  • At an organizational level, performance assessment as a part of the performance management system is a quarterly practice to capture performance reviews and notes into the HRMS system
  • Some teams capture notes monthly which feed into the quarterly conversation, to make the process simpler
  • The annual level conversation partly focuses on the performance that went by, but also is an opportunity to frame the opportunities for an individual in the upcoming year, along with goals 
  • The annual performance assessment is a two-part conversation where we also share the rating of how the individual has contributed to the organization 

Also Read: How often should you conduct a performance review

How did you decide on the right rating scale?

We looked at the three-point scale, the five-point scale and questioned if we needed a point scale. Furthermore, there were questions whether ratings mattered at all. Then, we decided to apply them to our context and see what would be meaningful. 

We transitioned performance rating from an understanding of meeting expectations to reflecting the contributions of an individual, vis-à-vis reflecting the expectations of the manager or the team. 

That was the pivot, a contribution based rating:

  • It is a four-point scale
  • The two middle options are solid contributors who are really good at their job in the middle and strong contributors who probably take it up a notch and go beyond the contributions of that role. You can see their contributions visibly in other parts of the organization and other teams
  • The outlier on one end of the spectrum are the exceptional contributors 
  • The other end of the spectrum has limited contributors who are newer and are trying to get their feet wet and trying to figure out how they can grow into a solid contributor 
  • The frame is to show people where they are now and maybe where they can feel help in order to perhaps contribute better

Where is this rating scale used? 

Most rating scales focus on performance of the past, however, as a part of our performance management system, we believe that any appraisal or promotion is for what they will do in the future. Thus, our performance rating scale seeks to capture the philosophy of focusing on the future. 

For instance, if someone has a bad performance in a quarter and if you're still excited about that person because they have continuously performed well, and believe that they are a strong contributor, you need to give them a rating that reflects that. Our rating scale brings this change into the conversation between the manager and the team member. For us, every performance review is a hiring decision. 

For us, every performance review is a hiring decision

We also request the manager and team member to mutually align on the rating for the performance management system. We expect there is no ambiguity on the rating and the areas of improvement as part of the performance review. 

Finally, the contributor rating plays an important role in awarding the compensation revision. The onus of this performance review for performance management system is put on the individuals instead of the managers so that the individuals take ownership of blocking a time, writing it down and ensuring that their manager also writes it down and then owns its own outcome for that. 

Also read: 100+ self review comments and phrases for performance assessment

How do you de-link compensation and ratings for team members?

Compensation is a function of the market as well. Thus, if someone who is a solid contributor has some issues with compensation, we review it on a case to case basis. Furthermore, these two conversations, compensation and recency, happen at least with a gap of thirty days, to ensure there is no recency bias. The compensation is driven by a strong recommendation from the HR around the range and each team also has a budget which they can allocate as they see fit. 

What principles should organizations follow while designing their performance management system? 

Try and understand what sort of an organization you want to build i.e. what are you really looking for in your people or what is that thing that needs to be in your DNA

At Chargebee, the hunger to learn and grow is something that you can see is what we look for, and that is probably an identifiable trait that you can notice. 

  • Write down the traits you are looking for 
  • Keep your performance management system simple
  • Articulate the why and share it with the team
  • Keep iterating as you scale

Is there a bell curve which you follow?

No, there is not really a bell curve that we follow at Chargebee, yet. We personally don't believe in the bell curve but we need to see as we scale through our own journey and how it evolves in the next one or two years. 

How do you train managers to deliver feedback effectively?

  • Showing managers how to write feedback is an important exercise that organizations have to go through from the top
  • Adopting the coaching methodology and then demand from managers to do it for their 1-o-1 team members 
  • Running and a lot of office hours leading up to the final date of the closing the performance review conversation, having the managers come to the HR team to walk them through some of the samples written down and how they could use the framework
  • Rolling out a proper manager program focused only on effectively giving written feedback

Wrapping up

To conclude, it is clear that effective goal setting with OKRs, performance review and written feedback collectively contribute to a robust performance management program. It is important to have a clear vision in mind when designing a performance management system, both on what you seek to achieve and the DNA of the organization you're trying to build. Finally, it is important to keep iterating on the go, to adapt to new realities and dynamic priorities

Suggested Reading

150+ useful performance review phrases for managers

8 best performance management software in 2022

How to strategically align compensation and performance management

Stay updated with talent and performance management best practices. Register for The Talent Tribe today

Sudeshna Roy

Marketing, SuperBeings

Hi There! I am Sudeshna. At SuperBeings, I lead our content strategy to bring you the best and latest on everything related to people management

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Performance
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How to choose the right performance rating scale 101

When it comes to performance review, there are several aspects you need to focus on, including when to conduct, how to conduct, etc. One important aspect that deserves due recognition is the use of performance rating scales. There are schools of thoughts on both sides of the discussion on using vs not using it. However, if used strategically, a performance rating scale can effectively make the employee performance review process smoother. Through this article we will cover:

  • When to/ when not to use a performance rating scale
  • How to select the right employee rating scale for your organization
  • Common pitfalls of using a rating scale to be aware of
  • Top performance rating scale questions you must use

Performance rating scale: Top use cases

While preparing your organization for a performance review, you might find yourself conflicted about whether or not you should use a rating scale. A performance rating scale is highly effective in gauging an employee’s performance from a quantitative perspective, but has limited scope when it comes to evaluating performance qualitatively. 

Therefore, we have identified the top situations and advantages of using a performance rating scale as well as when you should not be using them.

When to use a performance rating scale

You should use a performance rating scale when you need to:

  • Capture quantitative evaluation of the performance to study trends over time
  • Compare performance of two or more employee on similar parameters
  • Focus on a particular behavior or attribute of performance and don’t want the respondents to digress
  • Gauge concrete data points on performance to decide on appraisals and increments
  • Eliminate the ambiguity from interpretation of subjective responses
  • Get quick responses to your performance feedback

Advantages of a performance rating scale

Based on the use case above, here are a few advantages of using a performance rating scale:

  • Quantitative performance analysis which is easy to comprehend
  • Clear alignment of performance and compensation, leading to reinforcement of high performance
  • Ability to gauge a shared understanding of performance expectations and achievements
  • Ability to clearly identify areas of improvement and strengths

When not to use a performance rating scale

Despite the diverse use cases above, a performance rating scale doesn’t have universal applicability. In fact, using a rating scale in situations it doesn’t fit may lead to a poor performance review for employees. Therefore, you should refrain from using a performance rating scale when:

  • The job roles and responsibilities between employees are not consistent and cannot be compared
  • The role is relatively new and the expectations from performance are ambiguous
  • You want to personally evaluate the performance of each employee
  • You need a detailed report on the developmental areas and remedial actions for an employee
  • You want to offer constructive feedback on the way forward for performance improvement

Disadvantages of a performance rating scale

Here are a few disadvantages of using a performance rating scale:

  • The objective responses might be interpreted differently by different raters based on inherent biases (keep reading to learn more about these biases and how to avoid them)
  • Managers may over/under rate an employee based on few perceptions
  • Performance ratings might label a person without enough context, leading to low motivation and other challenges
  • Focus shifts from development in performance to rationale behind the rating
  • Getting a good rating becomes important over performing well

How to select a performance rating scale 

Now that you have an idea when to use a performance rating scale and the various advantages and disadvantages, you need to move to the next phase of understanding how you should select the right performance rating scale. 

Depending on the nature of responses to the scope and intent, there are several types of performance rating scales that you can choose from. In this section, we will help you understand the different types that you can explore and best practices to make the right choice. 

Types of performance rating scales

Focusing solely on performance, we will discuss the top 4 types for rating scales that you can use for different situations. 

1. The Point Scale

The point scale is one of the most commonly used employee rating scales used by organizations. It involves rating employee performance on a pre-decided scale across a spectrum of responses. It can range from a 3-point scale to a 10-point scale depending on the scope and the need

For a long time, the 5-point scale was the one that most organizations relied upon. While the 3-point scale gave only a macro level view, the 10-point performance rating scale became too comprehensive. Thus, the 5-point scale maintained a balance of being detailed but not overwhelming, where identifying differences between the points was difficult. 

The points on your point scale can be numbers or numerals with each number having a corresponding meaning. Alternatively, it could be words like Average, Above Average, Exceptional, etc. to indicate performance levels. 

In the most recent times, there has been a rise of the 4-point scale which focuses on eliminating the neutral or the middle option which is often seen as an easy way out that requires no further explanation. 

4-point scale example

4 point rating scale

2. The Likert Scale

Another common performance rating scale that many organizations use is the Likert scale. Like the point scale, it generally has 5 parameters on the scale. However, the difference lies in the value of the parameters. They are always written and the same for all questions. 

The five options on the Likert scale include

Strongly Disagree-Disagree-Neither Agree Nor Disagree-Agree-Strongly Agree

While the normal range is five options, it can range from 3 to 7 depending on the context and performance parameters. 

The Likert scale can be used as a matrix with statements on one side and the scale options on the other and can run like a list for performance review. An effective Likert rating scale generally has an equal number of positive and negative outcomes with a neutral option in between. 

Likert scale example

likert scale for performance review

3. A scale to improve above average spread

This is a reinvention of the point scale which changes the balance of the positive versus the negative options. Generally, a point scale has an equal number of options that indicate that performance needs improvement and for a job well done. However, many organizations claim that a limited number of options on the positive side make it difficult for them to distinguish between good performers and top performers. 

In most cases, if there are 5 options, with one neutral in the center, there are only two options indicating good performance. Generally, these two options are unable to capture the performance rating for those 1-2% employees who set new expectations and a bar for performance. Invariably, their exceptional performance fails to get noticed and rewarded and is equated with the good performance of other employees.

To bridge this gap, many organizations are using a performance rating scale which increases the above average performance spread. The scale for below average performance is limited to one, which can be substantiated with qualitative feedback. On the other hand, the scale focuses on more above average performance options.

Example

how to rate beyond average performance

4. The Frequency Scale for Interpersonal Skills

Finally, when it comes to a performance rating scale for interpersonal skills, the frequency scale is most sought after. Like most scales, it consists of a statement, followed by a few options. However, the nature and scope of the statement and options is what makes a difference. 

On the statement front, instead of directly asking whether an employee manifests a particular skill or quality, it focuses on a behavior that comes as a result of personalizing that skill. For instance, instead of inquiring if the person has good communication skills, the focus should be on behavioral aspects like display of active listening, ability to articulate thoughts, confidence of presenting in front of a group, etc. 

The options, on the other hand, seek to understand how frequently that behavior has been observed. The idea is to gauge whether the employee has been consistently displaying the desired behaviors or is there a particular pattern to it or if it has just been observed as an off chance. 

Frequency scale example

The employee starts and ends meetings on time and runs them with a concrete agenda

  • Not at all
  • Seldom (20% of the times)
  • Sometimes (40% of the times)
  • Most of the times (70% of the times)
  • Always (90-100% of the times)

This question can help gauge the time management, organization and planning skills for an employee, without directly asking the question. 

When to use numbers vs words performance rating scale?

As you have seen above, your performance rating scale can have options in the form of words or numbers. However, choosing which way to go can have an impact on the overall efficacy of the performance review process. It is best to use a rating scale with words over numbers because it is:

  • More explanatory as numbers can have different meanings for different raters
  • More personal as being associated with a number label can be a little dehumanizing
  • Better accepted as numbers are generally absolute and can sound harsh

However, you can still use the number rating scales to review performance in situations where you need an absolute rating or when there is a clear and uniform understanding of what each number represents.  

How to choose the best performance rating scale? 

Working with multiple growing organizations over the years, we have been able to identify a few tips and tricks that can help you select the right employee rating scale for your next performance review. 

1. Go for a 4 or a 5-point scale

As a growing organization, choosing a 4 or 5-point performance rating scale makes sense because, it: 

  • Is neither too abstract nor too cumbersome and detail oriented
  • Will ensure that while your managers have enough options to choose from to rate employee performance, they don’t get lost in the sea of options 
  • Can help eliminate the risk of managers going safe with the neutral middle option, by removing the same and going for a 4-point scale with only positive and negative options

2. Choose description over number

To augment the efficacy of your performance review rating scale, choose one which provides options in words or a description over numbers to:

  • Ensure that your managers are able to give constructive feedback without an absolute label
  • Prevent employees from being demotivated or left with a feeling of condemnation in case they receive rating in the low half of the spectrum
  • Prevent any confusion of what the numbers means, which may lead to a skewed analysis

3. Be aware of the biases

Almost all performance rating scales are vulnerable to biases both in their scope and nature as well as for the rater themselves. Thus, when you pick a rating scale, you need to be aware about the potential biases and have remedial actions in place to ensure that they don’t give you an unauthentic picture of the overall performance. We will talk about some of the common pitfalls and biases in the next section for greater clarity. 

4. Create clear differences

When you choose a performance rating scale, you need to ensure that the difference in options is very clear and not ambiguous for the raters to figure out on their own. There are several aspects to it:

  • First, having one option as sometimes and the other as seldom can be difficult to differentiate between
  • Second, ensure that two options are not poles apart, leaving room for several performance categories in between. For instance, you can’t have one option that never meets expectations and the other as often meets expectations. There needs to be a balanced spectrum

5. Use the right words

Next, it is very important to use the right words in the statements and options that you choose. When it comes to the options, make sure there is a clear index of what each option means, especially if it is numeric. This index must be shared with all the stakeholder, the raters, those analyzing the results as well as the employees

Similarly, the questions should be very specific on one performance aspect. For instance, if you combine performance on communication and punctuality, it might lead to a lot of confusion. An employee might have great communication skills, but may not be punctual and thus, addressing them in the same question will be difficult. Furthermore, even aspects within the same performance parameter like active listening and ability to present in a large group can be separate.  

Common biases in a performance rating scale

Now, let’s look at some of the common biases a performance rating scale might be vulnerable to that you need to be aware of and try to avoid to the maximum extent possible:

1. Definition bias

As discussed above as well, the definition for options can be significantly different even when they are descriptive. This is so because all of us have different notions for each term. For instance, a manager might award an exceptional rating to some of his/her employees because they have been performing consistently well and that’s how they define exceptional. On the other hand, the bar for perfectionism might be too high for another, leading to a lower incidence of being awarded exceptional. Similarly, in instances where the options talk about meets or exceeds expectations, bias on what the expectations are can set in.

How to prevent this: The easiest way to prevent the definition bias is to have very clear definitions for all options which are communicated time and again to all. 

2. Leniency bias

The leniency bias occurs when the rater tends to give a more lenient or positive rating to an employee than what the performance actually begets. This can be seen when the rating is more on the positive side. Mostly the reason is that managers don’t want to demotivate their employees with a lower rating and, thus, end up giving a higher rating, which may not be a true reflection of the performance.

How to prevent this: Leverage a performance rating scale which increases the above average spread and talks about different aspects like top performers, outstanding, etc. This will ensure that decent performance is ranged at above average while exceptional ones have a separate rating. 

3. Numeric bias

Numbers can have different meanings for different raters in a rating scale. While each number can have a different meaning, the entire spectrum can be also looked at from two lenses. For instance, on a scale of 1-10, both 1 and 10 can be perceived as the top or the bottom. 

How to prevent this: Similar to the definition bias, the numeric bias for a performance rating scale can be prevented by using a clear index which clearly illustrates how the spectrum works and a definition against each number. 

4. Centrality bias

This is a very common bias when it comes to using a performance rating scale. Here, the rater tends to select the neutral or the central option to avoid any conflict or external explanation. More often than not, poor performance needs to be substantiated with improvement actions while high performance needs to be supplemented with evidence and rewards. To avoid any such actions, some raters take the easy way out, which doesn’t help differentiating between high and low performers.

How to prevent this: The easiest way to prevent the centrality bias is to remove the center or the neutral option. As shared above, you can simply go for a 4-point scale which doesn’t have a neutral option and thus, the rater has to distinguish between high and low performers. 

If you are dealing with consistent poor performance issues within your team, this article on Performance Improvement Plan might help.

Performance rating scale questions 

Invariably, you will have a statement or a question which will become the basis of the ratings for your managers. This final section will focus on the different nuances around performance rating scale questions that you must be aware of. 

How to choose right rating scale questions

Let’s start with a basic understanding of how to choose the questions for your performance review rating scale which can help you yield the best responses. To make the right choice, you must ensure that your questions are:

  • Relevant for a group of employees. This suggests that your questions should have a meaningful spread and should be able to capture diverse performance levels
  • Valid for the critical parameters for your organization. Put simply, your questions should seek answers for factors that define success for your organization. Simply getting ratings on any parameters will yield no impact
  • Crisp and to the point. Don’t use jargon or very fancy language. Keep the questions simple and easy to understand
  • Concrete and not ambiguous. The meaning of your questions should not be left for interpretation by the rater, they should be very specific
  • Supported by the right kind of options or responses. For instance, if your question/ statement is The employee takes interest in team building exercises and your options are likely, not likely, etc. it may not make a lot of sense. However, options like never, sometimes, often, always, etc. make sense 

Read 150+ performance review phrases to find a diverse set of questions and statements for your rating scale across 17 employee qualities

Common questions for different types of performance rating scales

Before we conclude, here are some examples of common questions you can use for different types of performance rating scales. These questions can help you understand which scale is most appropriate for you depending on the situation. 

Point scale

  1. How well is the employee able to communicate his ideas?
  2. How often does the employee own up to her mistakes?
  3. How well does the employee make an effort to go out of his way to help others?

Likert scale

  1. The employee takes initiative without being asked to
  2. The employee pays attention to detail
  3. The employee delivers all the work before deadlines

Frequency scale

  1. The employee respects the opinion of others
  2. The employee is able to communicate his ideas clearly in front of others
  3. The employee understands the project needs effectively

Wrapping Up

While there are different views on whether or not a performance rating scale is the best tool to measure employee performance, there is no doubt about the merits it brings along. Therefore, it is critical for organizations to leverage this potential. Here’s a quick revision of everything you need to know about performance rating scales:

  • You should use rating scales to get concrete data points for quantitatively driven performances or when you wish to compare performance levels
  • Rating scales are easy to administer and quick to get results for
  • You may want to stay away from rating scales when you want to measure progress for roles which are different or are relatively new, with no benchmarks
  • You must be cognizant of the rater biases and contexts while interpreting rating scales
  • You must understand the different rating scales before choosing the right one based on the number and nature of responses for your needs
  • When choosing a scale, aim for 4-5 point scale, which focuses more on numbers than description, be cautious about the words you use and have clear differences between different options
  • Finally, make sure all your questions are relevant, valid, crisp, clear and supported by the right options

Now that you have a comprehensive understanding about performance rating scales, you should get started with applying the same to gauge performance levels in your organization. Follow the best practices and be aware of the pitfalls to make a dent in organizational success. 

Suggested Reading

150+ performance review phrases to use in your next employee review

100+ most useful self appraisal comments 

How to address poor employee performance at work

Manager Essentials
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min read

How Can Managers Use Employee Coaching to Unlock Performance

“Coaching is unlocking a person's potential to maximize their own performance. It is helping them to learn, rather than teaching them.” - John Whitmore 

Employee coaching is the secret tool that high performing organizations use to develop and nurture talent they already have. It supports continuous  performance management by not only addressing challenges of today, but also preparing the employees to tackle what comes their way in the future. 

In this article we will discuss:

  • How to provide coaching to employees at different levels of performance
  • 16 tips for managers to use coaching to improve performance
  • Top skills for managers to become better coaches

Importance of employee coaching

Before we discuss further about how coaching can be implemented to achieve performance improvement and how managers can support the same, let’s quickly look at a few reasons that illustrate the importance of employee coaching:

importance of employee coaching

On a closer look, you will see that employee coaching not only enhances employee experience leading to greater engagement and retention, but also has direct business impact with better performance, productivity and revenue. 

Identify coaching needs for different levels of employee performance

Before we start with specific employee coaching tips, you need to understand that the same coaching approach may not work for performers across different levels in the organization. There are two sides to this understanding:

  • First, coaching will be different for different vertical levels based on tenure and experience within an organization. The same employee coaching framework will not work for a fresher and for someone with 30+ years of work experience. 
  • Second, coaching for high performers will be different from that for a sub-optimal performer. You can either get this understanding by looking for performance trends manually or use a tool. For example, the Performance Snapshot feature of SuperBeings helps managers with a 9 grid matrix to identify employees at different performance levels based on their performance history over time and their future potential. 

Once you have figured out different groups of performers, use this list of tips to support employee coaching at different performance levels:

1. The newbie

  • Avoid micromanaging
  • Give direction to ensure a culture fit
  • Offer constructive feedback

2. The ones who have just started performing 

  • Encourage desired behavior
  • Appreciate a job well done
  • Help understand the next level of responsibility

3. The ones performing well

  • Help create a career trajectory
  • Encourage greater responsibility
  • Appreciate efforts and recognize initiative

4. The masters

  • Focus on niche coaching
  • Help navigate leadership journey
  • Create a ripple effect by encouraging second generation coaching

5. The high performers

  • Help chart out their high potential professional journey
  • Encourage them to anticipate potential challenges and prepare them to deal with them
  • Focus on building their leadership skills
  • Present them with new challenges to innovate and use creativity
  • Don’t let them off the hook because of halo effect
  • Understand and expand their core motivation

5. The low performers

  • Understand key challenges
  • Promote avenues for continuous learning
  • Involve them in creating a performance improvement plan
  • Encourage them to identify right opportunities for growth
  • Provide constructive feedback
  • Reward incremental performance improvement 
  • Read how to deal with poor performers to learn more specific tips for coaching the low performers

16 tips for managers to use employee coaching for performance improvement

When it comes to improving performance, employee coaching can help in many ways. Here are some actionable tips for you to implement easily.

  1. Ask questions to enable employees to come to solutions on their own, guide the way instead of driving them to the finish line.
  2. Have some questions ready in advance as an ice breaker to avoid any awkward silence
  3. Refrain from jumping to solutions if the employee is taking a little time to think, offer a safe space for brainstorming
  4. Promote open ended questions versus those with binary responses to encourage conversation
  5. Make your phrasing empowering, instead of using terms like “you should”, say “how would you”
  6. Try to make each conversation growth focused, instead of spending too much time on reflecting what has happened. Focus on the future
  7. Focus on professional development, even beyond organizational goals
  8. Show faith in the employee you are coaching and encourage them to believe in themselves
  9. Focus on identifying performance problems for the employee and ensure they understand the same
  10. Collectively with the employee, try to understand the underlying factors that can promote better performance outcomes
  11. Understand common barriers to performance and categorize them as internal (specific to the employee) or external (like organizational support)
  12. Reflect on your conversations to analyze when you are asking questions and when providing solutions
  13. Create an action plan for long term performance goals and areas of improvement
  14. Be consistent in following up the progress and address challenges that might come along the way
  15. Offer constructive feedback at every step
  16. Be open to feedback from the employees on what can be better

5 Must Have Coaching Skills for Managers

To undertake the practices mentioned above, managers need to have a certain set of skills that can enable them to unlock performance for their employees. Following is a list of top skills to hone and some best practices to master the same.

Skill #1: Inquisitiveness

For employee coaching, managers need to move away from providing solutions and towards asking the right questions. The questions should be powerful enough to help the employees think in a growth oriented direction.

How to become inquisitive?

  • Ask meaningful questions
  • Focus on open ended questions 
  • Keep your questions with a positive tone — don’t start a question with “don’t you think” or the like phrases
  • Have follow up questions from within the conversation

Skill #2: Active listening

While coaching is about providing guidance, it seeks to ensure that guidance and support is offered to the situation of the employee. Hence, active listening is an important skill for managers if they want to become better coaches.

Active listening involves hearing, understanding, reflecting on and responding to what the employee has to say. 

How to become an active listener?

  • Provide your undivided attention
  • Use your facial gestures and body language to indicate you are listening
  • Paraphrase and summarize to ensure your listening and understanding was accurate
  • Don’t interrupt to force your point of view
  • Don’t jump to conclusions

Skill #3: Growth mindset

Managers who seek to excel in employee coaching need to have a growth mindset with a commitment and belief for the development and success of their employees. 

How to adopt a growth mindset?

  • Align organizational priorities with growth opportunities for the employees
  • Encourage employees to see challenges as opportunities
  • Help them in mastering the art of reflection and learning 
  • Empower team members to come up with alternative solutions to the same problems
  • Facilitate autonomy and flexibility to innovate and experiment

Skill $4: Empathy

As a coach, managers will be exposed to many sensitivities of an employee that might be holding them back. In such a situation, empathy as a skill is extremely important to create a high level of comfort and confidence.

How to become empathetic?

  • Check your unconscious biases
  • Be open to new perspectives and experiences
  • Connect with your employees on a human and emotional level instead of just transactional
  • Be genuinely interested in the employee’s growth

Skill #5: Consistency 

Finally, for managers to become a highly effective coach, the skill of consistency needs to be imbibed. The intent is to ensure that your efforts are not limited to a one off instance, rather are sustainable and scalable over time. 

How to become consistent?

  • Create an action plan with a follow up schedule
  • Calendarize your 1:1 meetings with employees you are coaching
  • Constantly motivate the employees on their performance
  • Don’t be too pushy or over burdening

Wrapping Up

Drawing this article to a close, it is quite clear that employee coaching has incredible potential to skyrocket performance for any organization. However, a few things need to be kept in mind.

  • Clearly distinguish between coaching and other activities like managing and feedback
  • Have different coaching frameworks and approaches for different levels of performance
  • Coaching works in different ways for high and low performing employees
  • Managers need to hone specific skills to facilitate effective employee coaching
  • Focus on the above mentioned best practices is important to leverage coaching for improving performance

If you are interested in checking out more useful resources on managing employee performance, do check this out

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min read

How to Use Start Stop Continue Feedback for High Performance

Feedback is an integral part of creating a high performance culture. Research shows that 60% of employees reported wanting feedback on a daily or weekly basis. However, in addition to the frequency of the feedback, the content of the same is also very important. 

That’s where a Start Stop Continue feedback becomes important. Instead of simply stating how the performance has been, start stop continue feedback enables managers to highlight the desirable actions and behaviors for employees and simultaneously shed light on what needs to be changed. In this article, we will discuss:

  • The meaning and importance of start stop and continue feedback 
  • When to use this form of feedback 
  • Start stop continue feedback best practices
  • 15 examples of start stop and continue feedback 

What is start stop continue feedback?

Start stop continue feedback is a highly intuitive and easy to implement feedback framework for growing organizations. It can be used for and by anyone including teams and individuals for feedback by managers and peers as well as for self reflection. Essentially, the start stop and continue feedback has three aspects or components, including:

  • Start: Focuses on actions or behaviors that an employee should commence for high levels of performance, generally around the areas of improvement
  • Stop: Focuses on actions or behaviors that should be eliminated or significantly reduced because of their negative impact on the performance, mostly the weaknesses
  • Continue: Focuses on actions or behaviors that must keep going based on their positive impact on the performance, often referring to the strengths

Thus, the start stop continue feedback enables employees to receive feedback on all aspects which is constructive, appreciative and sets a ground for improvement. 

Importance of start stop continue feedback

Now that you understand what this framework means, let’s quickly look at why you should use it for your organization:

1. Easy to implement

The start stop continue feedback is very easy to implement and does not require any specific training or upskilling. You can get started with a simple session introducing the framework. Furthermore, it can be implemented across the organization irrespective of the functional diversity, making it an all encompassing framework.

2. Easy to interpret

When you receive the start stop and continue feedback results, they are quite easy to interpret and put to action. Chances are seldom that you will have to read between the lines or require high level analysis, making it ideal for growing organizations with limited resources to easily improve employee performance.

3. Action focused

The start stop continue feedback delivers clear actions that an employee needs to take to facilitate high levels of performance, preventing it from being yet another form of feedback which is generic.

4. Encourages improvement and new ideas

Finally, the framework enables everyone to put on an analytical hat while providing feedback and come up with new and fresh ideas for better performance. 

When to use start stop continue feedback?

While the start stop and continue feedback framework has widespread relevance and adaptability, its impact increases in some specific situations, including:

  • When you have a clear understanding of the opportunities and challenges
  • When you want to cover all aspects of feedback (appreciation, areas of improvement and constructive criticism) together 
  • When you want to deliver action oriented feedback, especially during OKR or goal progress review or while writing a performance improvement plan
  • When you want to build a personal development plan

How to ask for start stop continue feedback from your manager?

As opposed to many other feedback frameworks, the start stop continue feedback can be sought by employees from managers and others to reach their goals in an effective manner. Here are a tips questions you can leverage while asking for start stop and continue feedback:

  • Ask specific questions in areas which you consider integral for your growth
  • Ensure that there are questions for all the three components to get a holistic picture
  • Try to gauge different aspects in terms of actions, behaviors and support for each component
  • Ascertain that answers to the questions are able to help you create a development plan with clear next steps
  • Try to get answers from 2-3 managers/leaders/peers for a diverse understanding
  • Focus on self reflection for the questions as well (Identify specific areas of improvements with the self assessment prompts)

How to give start stop continue feedback as a manager?

When it comes to giving start stop continue feedback, it is important to follow some best practices to maximize its effectiveness. At times, even when the intention is correct, managers might deliver the start stop and continue feedback in a manner that does not yield the intended impact. Use the following tips to bridge the gap from intention to impact.

1. Recommend specific actions 

As a practice, start stop continue feedback seeks to be action oriented. However, you have to make sure that the actions are specific and backed with supporting resources/ guidance on how to achieve them. 

For instance, if an employee doesn’t collaborate effectively, instead of using ‘Be more collaborative or be a better team player’ as a start action, you can use:

‘You should listen to what your team members have to say more often and build a relationship with them to facilitate meaningful synergies. I would recommend connecting with them over tea/coffee breaks, start asking for help instead of doing everything on your own and even lend a helping hand once in a while.’

2. Provide context and reasoning

If you simply mention an action that an employee should start, stop or continue doing, it might not have a large scale impact. However, if you back it up with examples and evidence, you are more likely to influence their behavior. 

For instance, if you tell an employee to continue upskilling himself/herself in digital marketing, it might be a good idea to illustrate why you are saying so with an example of how his/her skills have improved and the impact it has created for the organization as well as for the employee professionally. 

3. Maintain a balance

The start stop continue feedback framework seeks to motivate employees to take necessary action and improve their performance. However, if your feedback is skewed more towards start and stop actions, the employee is likely to get demotivated, considering himself/herself as a low performer. On the flip side, if your list of continue doing far exceeds the other two, it might set unrealistic expectations in the employee about his/her level of performance, potential appraisals and might lead to overconfidence. 

4. Be objective

Finally, when you give start stop continue feedback, you need to make sure you are objectively focused on the performance around a particular goal/ area in mind. If you are talking about the interpersonal skills of an individual and you mention continuing high levels of technical efficiency, it will dilute the whole purpose. Stick to the main theme and provide feedback for the same, without being deflected around other aspects of the employee. 

Top start stop continue feedback examples

As mentioned above, the start stop and continue feedback can be used for teams as well as individuals. Here are a few examples for each of the two segment groups that you can consider as a starting point. 

Pro tip: Start with a specific goal in mind for which you want to create the start stop continue feedback strategy

I) Start stop and continue feedback examples for teams

From a team perspective, here are the top 5 examples:

Example 1: Facilitate better team understanding

  • What to start: Regular team meetings with high levels of attendance
  • What to stop: Working in silos without informing the other person what’s going on
  • What to continue: Team activities, lunches and get togethers

Example 2: Ensure better customer service

  • What to start: Clear division of client responsibility and Robust customer service process with specific milestones
  • What to stop: Delay in complaint resolution
  • What to continue: Proactive customer service with regular check-ins

Example 3: Build an empathetic culture

  • What to start: Regular sensitization activities on inclusion, empathy, compassion
  • What to stop: Acceptance of casual offensive comments
  • What to continue: Regular communication of empathy as a core company value

Example 4: Meet monthly targets

  • What to start: Setting clear OKRs with distribution of responsibility
  • What to stop: Putting accountability on only one person
  • What to continue: Effective sales meetings leading to high levels of conversions and Marketing efforts resulting in brand recall

Example 5: Create an attractive place to work

  • What to start: Focus on health and wellness by offering resources, support, insurances, time off
  • What to stop: Unnecessary overtime and Skewed work-life balance
  • What to continue: Regular team outings and Benefits and perks

Start stop and continue feedback examples for individuals

Here are the top examples you can use to set start stop and continue feedback specifically for individual employees based on their career trajectory and goals:

Example 1: Improve communication skills

  • What to start: Take up a course on storytelling to improve the way you pitch and Prepare a script and practice it well before presenting
  • What to stop: Using colloquial terms and slangs
  • What to continue: Use body language and gestures to communicate

Example 2: Build technical knowledge

  • What to start: Pick up courses on AI/ML and data science
  • What to stop: Focus only on tech stack you are working in
  • What to continue: Participation in hackathons and programming workshops

Example 3: Hone leadership qualities

  • What to start: Delegating work to others based on their strengths and interests
  • What to stop: Blaming everyone else for poor performance
  • What to continue: High levels of clear communication and team understanding

Example 4: Focus on health and wellness

  • What to start: 30 minutes of walk every day 
  • What to stop: Ordering food in every day
  • What to continue: 30 minutes of meditation and yoga

Example 5: Improve quality of work

  • What to start: Proof reading of work at least 3 times before delivery
  • What to stop: Multitasking between several projects at once rather than prioritizing
  • What to continue: Maintenance of a checklist with all timelines

Example 6: Take more initiative

  • What to start: Identify new areas where you can add value 
  • What to stop: Staying away from new projects and responsibilities
  • What to continue: Focus on picking up new skills and competencies

Example 7: Focus on interpersonal skills

  • What to start: Practice empathy by listening to others 
  • What to stop: Being disrespectful, even if unconsciously
  • What to continue: Clear communication

Example 8: Improve attendance record

  • What to start: Show up for meetings on time
  • What to stop: Taking time off without prior notice
  • What to continue: Adhering to timelines and being present at key discussions

Example 9: Facilitate better problem solving

  • What to start: Come up with solutions for problems and not just take problems to the leadership
  • What to stop: Hesitance to think outside the box
  • What to continue: Comprehensive understanding of the problem

Example 10: Be agile and adaptable

  • What to start: New courses and skills relevant for your functional domain
  • What to stop: Focus on long processes and cycles
  • What to continue: Willingness to change deadlines to adapt to changing priorities

Start stop continue feedback template

As we come to the end of our article, here is a quick template for you to help you get started with the right questions that you can add to your start stop and continue feedback strategy to ensure that all stakeholders get a fair understanding of what is expected of them.

Questions for start feedback

  • What are a few new skills that Mr.A can pick up?
  • As a part of Mr.B’s goal X, what additional responsibilities do you think he should take?
  • What are some competencies that will help Ms.P take the next career leap?
  • Ms.R sees herself as a Y in the next six months, how do you think she can reach there?

Questions for stop feedback

  • What do you think are some factors limiting Mr.L’s growth?
  • Ms.W is planning to take on these additional responsibilities, do you think she should refrain from any?
  • What is the one thing that if Mr.I stopped doing will help the team perform better?
  • Ms.O sees herself as a Y in the next six months, what do you think she should stop doing to reach there?

Questions for continue feedback

  • What do you think are Mr.T’s key strengths?
  • What do you think are some qualities and skills others can learn from Mr.K?
  • What are some responsibilities Ms.U shouldn’t leave for picking up others?
  • What do you think is Ms.D’s biggest contribution to the team?

While start stop continue feedback is the simplest way to provide actionable feedback, you need to make sure that the feedback you are giving is based on facts and not just mere opinions. Before you start your feedback session, analyze performance trends of the employee (it is even better to have it supplemented with behavioral data) as well as gather 360 degree feedback on the employee to have a qualitative understanding of the overall employee performance.

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