Blowing Up Performance Management 1.0 From the Inside: How One Manager Transformed His Company's Approach to the Dreaded Performance Review
July 18, 2011 at 11:09am
Determined to foster a culture of continuous feedback, enable coaching relationships outside traditional hierarchies, and encourage meaningful recognition among his engineering team, Gilt Groupe's John Quinn began experimenting with Rypple—a disruptive social performance management platform. Usage spread rapidly and organically, HR took notice, and Gilt soon rolled out Rypple companywide.
Background on Gilt Groupe: Founded in 2007, Gilt Groupe is an innovative, New York-based web 2.0 company that pioneered the concept of the invitation-only designer sample sale online. The company has grown rapidly over the past two years and now has over three million members and 700 employees. As an organization heavily dependent on attracting and retaining talented people, Gilt constantly strives to find ways to engage its workforce. And that's where Rypple comes in...
Background on Rypple: Founded in 2008, Rypple is a web-based social performance management platform that enables managers and their teams to share key priorities, update the status of goals, and recognize one another for great work—all in real time. Managers can ensure their teams get the ongoing feedback and 1:1 coaching they need to learn faster, stay on track, and achieve their goals more consistently. Employees can build a real-time portfolio of accomplishments and skills so they no longer have to rely soley on performance reviews for feedback, recognition, and reputation. Rypple's 35 employees are based in San Francisco and Toronto. It competes with a broad range of companies in the performance management space.
Gilt Groupe's VP, Engineering, John Quinn, despised traditional performance reviews. Not only did he find them intrusive, time-consuming, and ineffective, he believed strongly that they actually detracted from the culture of continuous, ongoing feedback and coaching he wanted to establish with his team.
Quinn hated the message traditional reviews sent to employees that their manager—and not they, themselves—was responsible for their career development and trajectory. He believed reviews encouraged the negative feedback and communication that often proliferated between managers and their direct reports. And he felt reviews focused too heavily on scorecards and rankings at the expense of employee development.
In his previous role at another start-up, Quinn had refused to do reviews of his employees.
This time, Quinn decided to do something about it. He had developed a highly functional approach to software development based on frequent iteration and quick retrospective summaries, and began to search for software that would allow him to apply the same rapid, ongoing, non-hierarchical approach to developing his team.
When he discovered Rypple, Quinn recognized that he had an opportunity finally do away with the backward-looking performance review and develop a culture of continuous feedback and coaching at Gilt Groupe.
Key Innovations & Timeline
How Do You Affect Change at a Big Company? By Starting Small.
Quinn signed up for Rypple on his company credit card and began using it with his 6 direct reports in November 2010. The application only cost a few dollars per user per month, so he didn't need permission from senior execuitves to get started.
Rypple's social platform has five major applications: goals, feedback, coaching, thanks, and Loops, which collects all the feedback already entered into the other applications and compiles snapshots of employee performance.
Quinn was most interested in the feedback, coaching, and thanks applications, and began using these with his six direct reports. Instead of waiting for an annual performance review from a superior, he and his team were able to ask for and provide feedback immediately. They could thank one another publicly for great work with badges they created—emblems with specific meaning to the team. And Rypple's shared 1:1 space allowed Quinn to set agenda items and carry on private conversations in advance of the weekly meetings he held with each of his reports.
Immediately, Quinn noticed an increase in the positive communication between team members. They were thanking one another more frequently and taking time to create badges with specific meaning to the company and the work they were doing. He also noticed that his 1:1 sessions became more efficient, effective, and meaningful. And just-in-time feedback meant he could correct an employee's course—or his own—before it was too late.
Like Facebook and other social software, Rypple didn't invent behaviors. It just encouraged and made more efficient the behaviors Quinn and his team knew they should be doing already: providing frequent, ongoing feedback, coaching, and recognition.
New users join Rypple through invitations from existing users. Quinn soon discovered that other Gilt employees had heard about Rypple and started using it. When the number had grown from six to 55, he approached the head of HR at Gilt and pitched Rypple as a replacement for the company's existing performance management process. By June, all 700 of Gilt's employees were using Rypple to manage their goals, ask for feedback and coaching, and send one another thanks.
Much to Quinn's chagrin, Gilt decided to replace its traditional performance review process with Rypple Loops. Indeed, Rypple engaged feedback from Gilt and other beta customers to help iterate and improve the product. While Quinn still hopes one day to do away with reviews entirely, he found Rypple's lightweight, continuous, real-time approach a lot less time consuming, and more valuable, than traditional reviews.
Challenges & Solutions
Over the last few decades, the notion of improving business performance has become completely disconnected from traditional performance management. Even as we've exploited new technology to find greater efficiencies in the way we manage our supply chains and our product development processes, we still manage our people according to a 50-year-old, paper-based process: the performance review.
Implementing Rypple meant that Quinn had to overcome this ingrained thinking. HR departments have become focused on compliance—not business performance—meaning their objectives are not always aligned with those of management.
Fortunately for Quinn, Rypple was in the process of developing Loops, a performance summary application. Rypple asked for feedback from Gilt and a select group of beta customers when developing the product, which enabled Gilt to run performance reviews that satisfied HR but were also lightweight and less cumbersome to Quinn and other managers. And because they drew upon the continuous feedback, coaching, and recognition Quinn and his team had been providing one another all along, the reviews no longer felt disconnected from real work.
It also helped that Quinn was able to demonstrate a track record of success from the large number of Gilt employees already using Rypple. Employees felt empowered by the application, which enabled them to build their own portfolio of accomplishments visible to everyone at the company, including their managers.
Once HR came on board, the software was quick and easy to implement, and the rollout was completed in about six weeks.
Benefits & Metrics
Typically, employees log on to traditional online performance management tools once or twice a year, in order to complete a performance review. At Gilt, employees were performing between100 and 250 actions per day on Rypple (comments, goals, thanks, notes) outside of the review process.
While it is too early to draw definitive conclusions about employee retention and engagement, it is clear that Gilt's managers and teams are employing the behaviors—frequent feedback, coaching, goal-setting, meaningful recognition—that have been shown to have a demonstrable effect on engagement over time.
If you have a vision for a dynamic transformation at your company, start small and see it through.
John Quinn was convinced there was a better way to manage the performance of his employees—one that emulated the collaborative, iterative, feedback-driven approach he used to build great software. When he found a tool that met his needs, he demonstrated its effectiveness within a small control group and then, based on the results, convinced the organization to follow.
Gilt Groupe, John Quinn, Rypple