What pains do we solve?
You worked hard on a project… and just two months later, during annual reviews, nobody seems to remember… and you get a poor review, because of some minor incident last week. Sound familiar? With annual reviews and other long-cycle style appraisals, the system has no memory.
FairSetup addresses this pain by allowing teams to keep track of how expectations are being met on an ongoing basis.
Whether in a company of 10 or 10,000, you always know and see those employees who will do just enough not to get fired. It’s frustrating. They affect culture, they affect the bottom line, and you want them either in or out, but not in between. FairSetup creates a healthy team dynamic where people become accountable to their peers on a regular basis.
When performing long-cycle reviews, people will rarely criticize themselves. Instead, they engage in selling themselves to try to get a good bonus or a promotion.
FairSetup makes self-assessment a natural part of the company short-cycle rhythm. The meeting format generally flows as follows:
- management assessment/recording
While self-assessment in this instance is not inconsequential (it can be set up to affect pay over time), it carries a low risk. Moreover, its purpose is not just to assess an individual, but to allow for adjustments in order to maximize the overall productivity/outcomes. So now the thinking is:
“I am going to present an accurate self-assessment, because doing so helps me grow, improves outcomes, and lets me ensure that I meet everyone’s expectations, thereby supporting my career growth.”
What sets early-stage start-ups apart from established companies is the culture of reliance on your peers and the subsequent accountability. The trouble with most non-start-up work environments is that peers don’t really have an incentive or an opportunity to give constructive feedback – especially when it is negative.
“Why would I give Joe negative feedback if this doesn’t really impact me? We’re both working for ‘the man.’ Besides, if Joe isn’t working hard, perhaps I don’t need to either.”
FairSetup supports a workflow by which individuals regularly provide self-assessment to peers which the peers have an opportunity to correct. Another benefit of the short-cycle nature of the reviews is that, rather than dwell on how someone may have missed expectations, the team can focus on what needs to be adjusted to ensure that expectations are met and outcomes are maximized.
Giving negative feedback is tough. It becomes especially tough when there is a single high-stakes discussion at the end of the year. With FairSetup, the combination of ongoing peer-based feedback, along with an emphasis on self-reporting in a manner that is transparent to peers, allows for a constant and agile evolution of expectations, objectives, and performance.
One major company in the Silicon Valley known for their strong culture at one point had quarterly reviews. Every review would take at least a full day of everyone’s time. When asked about it, employees would sigh and roll their eyes – “Yeah, this is one of those corporate side effects from having grown… I hate it.” Another major pharmaceutical company has a 360 feedback process that takes a full week of some people’s time and sometimes longer. FairSetup solves this problem – it is a natural addition to the workflow that often shortens the duration of team meetings while providing a robust framework to quickly make long-cycle decisions.
You know they’re bad when Forbes, Wall Street Journal, CNN, and Huffington Post say so. The problem is not so much that long-cycle decisions need to be made (like promotions or priority adjustments), but rather that long-cycle reviews need to be supplemented with a short-cycle process – and this is exactly what FairSetup does.
Performance reviews/appraisals/management are supposed to manage and improve performance. Unfortunately, given all the problems of long-cycle appraisals, they often end up being used for talent development or to check off check-boxes instead.
FairSetup works to directly assist in the management of performance on a regular basis.
If you have equity, you are looking for outcomes. If you do not… well… there is a reason why people differentiate between “working like a partner” and “working like an employee”.
FairSetup helps align teams with the mission, through peer accountability, and/or with outcomes, by creating a clear line of sight between performance, productivity, impact, outcomes, and compensation.
Operations does the work, but sales gets the money? Sales sells and operations doesn’t implement what sales promised? Operations doesn’t support sales? Sales doesn’t coordinate with operations? An all-too-common problem.
FairSetup allows companies to set up cross-department incentives ensuring that the various functions collaborate in order to achieve outcomes.
Every CFO would prefer to have lower fixed and higher variable compensation. This helps keep the costs under control in the event of market downturns, poor performance, etc. However, variable compensation can be a challenge. When it takes the form of a commission, the result can be misalignment within the team. And for non-sales employees, the variable compensation component is more difficult still.
FairSetup can be deployed to create a profit-share style engagement in which talent participates in the upside for the business while accepting a measured risk of hard times. For the company, if there is a market downturn, the total cost due to compensation is reduced without the adverse cultural effects that come from having to fire people.
It is a common frustration for employees that they do not understand how their compensation (bonus or otherwise) is connected to their performance. Some companies try to solve the problem using radical transparency (Business Insider: SumAll). Others attempt to hide the information, generally with adverse effects (WSJ: Workers Share Their Salary Secrets).
When people are compensated using the impact calculation that is produced by FairSetup, performance is directly related to compensation, removing anxiety and confusion around the subject. It also builds trust, collaboration, and other positive behaviors, all of which affect productivity.
Even Google has trouble sifting the wheat from the chaff (NYT Article) – the reality is that it is very difficult to ascertain at the time of an interview how someone will perform at their job. In a long-cycle system, the amount of time that it sometimes takes to arrive at such a conclusion about an individual can be months or even years.
With FairSetup, data about how everyone is meeting expectations is available on a regular basis and is collected through leveraging peer assessments, thereby ensuring accuracy.
Stacked ranking can lead to extremely poor morale (FairChannel: Forbes, TC, Vanity Fair). If you have a good HR department and low churn, people sometimes strive to simply not be in the bottom bracket rather than reach for the top, resulting in isolation, breakdown of collaborations, etc. And if you have variability in the workplace, having an opaque process of managers ranking reports once a year in a subjective manner can create an immense amount of anxiety and frustration for everyone involved.
FairSetup is unique in its ability to allow a ranking to evolve as appropriate. If a team is homogeneous, then the impact should be similar across employees resulting in a flat distribution. If there is a wild variability in performance, FairSetup allows the ranking to be formed in a transparent, easy-to-understand manner. Furthermore, it removes the stigma of the top/bottom 10%. If someone has low impact, it may be because they missed expectations, or because their attention is required elsewhere – FairSetup allows these factors to be taken into account.
Many companies struggle with cross-company collaboration, duplication of function, insufficient resource allocation.
FairSetup aligns everyone with the goals and bottom line of the company while creating an environment where everyone is accountable to peers and management in a psychologically healthy manner.
At the end of the day, compensation and performance management are hard problems. Most people have sought to solve this problem through introducing complexity, which may alleviate an immediate need, but at a tremendous cost.
FairSetup is the only short-cycle live-360 impact-driven system that feels fair when you use it. To calculate impact by tracking simple data about meeting expectations is… well… the most natural way to do it.