Making the shift to continuous performance management
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When Matt Hoffman started at DigitalOcean last year as its first vice president of people, the rapidly growing cloud infrastructure company lacked a formal talent management and feedback process for employees.
Some employees were rated and faced annual reviews, and others regularly talked with their managers to get feedback on their performance. But it was an inconsistent process at best.
Hoffman noted that it's common for an early stage startup type of approach as a company scales up amid fast changes and other priorities. DigitalOcean now employs nearly 300 people, three times more than it did two years ago, and is growing fast.
Hoffman's team launched a more structured employee feedback program using Reflektive and Culture Amp. Reflektive, a next-generation performance review tool, provides for quarterly goal setting and continuous assessments on performance and progress against those goals. Culture Amp measures employee engagement.
"Performance management should be ongoing all the time," Hoffman said. "At any point, people should know where they are doing well and not so well; and where they stand against their goals, and where they are going in their career."
Hoffman said he considers himself to be a change agent, but that change needs to be managed to be effective.
DigitalOcean's Talent Development team provided substantial guidance in this area, including in-person and online training, instruction guides and emails, to help people understand how to successfully use the performance review tool and make sure they are giving and receiving feedback effectively.
"It is a great platform, but you need to create a culture that supports open, honest and candid feedback in an environment where employees authentically believe the company is invested in their success," he said. "Unless you do all that, you're not going get the radical candor you need, and the feedback process is not going to work as well as it could.”
Passion for HR fuels high performance
At DigitalOcean, Hoffman said he needs to personally show that he appreciates feedback, even if it is tough criticism. "To drive the change you want, you need to model it to demonstrate that you take those behaviors seriously."
He said he believes in the "servant leader" model. "Your job is to serve your team members and understand what they need to make them as effective and high-performing as possible. It's not to tell them specifically what to do. It's to provide guidance, structure and a framework for them to make their own decisions, and unleash them to do incredible things they never thought they could."
Hoffman said he is passionate about helping to build high-performing cultures, and the opportunity for HR to be a key catalyst for performance. "People spend so much of their day at work. How can you help them find meaning in what they do? How can you help them get excited about their work and career? This is what I love doing. We're privileged in our field to be able to have such a powerful impact on one of the most important aspect of people's lives."
Hoffman said he decided to take on the change agent role because DigitalOcean is focused on building a world-class performance culture.
"That requires changing the way we think about talent and making sure we have the right tools and processes to invest in the best talent available. Using these tools helps support our approach on continuous feedback and improvement, and leveraging data to make sure we are always getting better at what we do."
Hoffman said the main challenge in starting the use of Reflektive and Culture Amp was to get people comfortable moving off a traditional rating process and to get them in the habit of investing the time to provide more continuous feedback.
"But once people see how powerful it is and how quickly we can move the needle on performance by having unambiguous data-enabled insights, they become big supporters of the process," he said.
In a webinar from Reflektive, Lyndsey Hannigan, talent development manager at DigitalOcean, said another key challenge is that in a fast-growing company, teams, leaders and business needs change all the time.
It becomes somewhat of a "logistical challenge" to keep up with the changes and make sure people receive consistent feedback as they join new teams.
In response to the challenge, the team was careful about building the performance management process, she said. Almost every quarter, a different dimension is added and the system is built bit by bit in order to first test anything new.
Traditional performance reviews prompt dread and fear
The Reflektive performance review tool is used in several ways to affect employee development at the hyper-growth company. "Reflektive is a very simple and easy tool to use, and it integrates well with our other HR systems," Hoffman said. "That is one of the reasons it works so well for us and we have had such good adoption with it."
DigitalOcean integrates Reflektive with the company's collaboration tool, Gmail, to provide a template for a stream of continuous feedback. And the company encourages employees and managers to meet at least weekly for frequent check-ins against goal progress and coaching.
Hoffman's team provides significant training and support to managers to ensure the one-on-ones are productive and useful, and focused on the most important behaviors to drive performance, he said. All the feedback is captured and documented in the Reflektive performance review tool and Bamboo HR, the company's HRIS.
The company also uses Reflektive for Objectives and Key Results (OKRs), a framework for employees to connect their personal goals with the company's comprehensive business strategy. Each employee sets three to five goals for each quarter and several discrete tasks for achieving those goals. At the end of each quarter, managers and employees meet to discuss the goals and update them if necessary.
Everyone in the company, from the CEO down to the most junior employee, should establish clear goals, he said, and the connection between those goals should be clear. Goals are set and reviewed on a quarterly basis because the company is changing so much and so quickly, he said. "You need to be constantly agile. You don't want to be stuck in a goal that is no longer relevant as the business moves quickly."
Culture Amp measures employee engagement
DigitalOcean conducts surveys with Culture Amp twice a year on an organizational level, and also offers monthly pulse surveys to check in with teams and smaller groups. "We care a lot about the data but everything is voluntary," Hoffman said. "We get significantly higher response rates because people are interested in sharing feedback, and because we demonstrate that we care about what people have to say and act upon it accordingly."
Results from those engagement surveys are matched up with Reflektive to see if highly engaged employees are also performing better, he said. Data show there is a strong correlation between engagement and performance.
Hoffman cited several reasons DigitalOcean ended traditional performance reviews and scaled ratings.
While the company needs processes for measuring performance and developing employees, formal, written yearly evaluations prompt a lot of dread and fear, consume too much time and look back instead of forward.
“So much of the research and best practice now points to why the process is outdated and that there are better ways of driving performance and continuous improvement," he said.
More about Matt Hoffman, VP of people at DigitalOcean
- Formerly senior director of people operations at Return Path
- Top mentors include Mark Frein, chief performance officer at Return Path, and Matt Blumberg, co-founder and CEO of Return Path and author of Startup CEO: A Field Guide to Scaling Up Your Business
- Undergraduate degree in policy analysis from Cornell University and graduate degree in industrial and organizational psychology from New York University
- Grew up on Long Island, N.Y., where he lives now with his wife and three young daughters ages 5, 8 and 11
- Father was an executive in the garment industry and mother was an elementary school teacher for New York City public schools
- Is a voracious reader and enjoys going to Broadway shows, but spends almost all of his spare time now with his daughters -- attending their activities, including basketball, ice skating and drama
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