"People are naturally good" is the firmly held belief influencing everything Google does, including performance management.
Despite a year of slow hiring, Google's headcount stands at 160k+ employees.
Performance management plays a pivotal role in employee satisfaction and needs to be super structured, especially when the number of employees is so high.
Being a tech giant, engineering and ranking algorithms are deeply ingrained in Google's DNA.
The tech company has an internal performance management system, which follows an airtight ranking algorithm.
This ranking system rates employees as average, top, and below-par performers and zooms in on the top-performing and underperforming employees.
Google is a great inspiration for HR leadership and people management best practices. They've already spent tons of money and time figuring out what works best. And they've even talked about it openly, so you can use their practices as a benchmark and potentially adopt some of their successful strategies.
So, what lessons can we learn from Google's stellar people management strategies?
Google is a perfect example of how founders can play a pivotal role in shaping company culture.
To understand the culture at Google, you must understand the founders' vision.
Larry Page and Sergey Brin (Google's legendary founders) wanted to organize information and make it available to everyone without discrimination.
As a result, the driving force at Google is the tenets of trust and freedom.
Their top-down approach reinstates that company culture can thrive when people are given adequate freedom and trusted to do good.
In doing so, everyone naturally performs better and has much higher accountability.
Their philosophy is deceptively simple: Want better from your employees? Trust them more!
"Give people slightly more trust, freedom, and authority than you are comfortable giving them. If you're not nervous, you haven't given them enough.
If you believe people are fundamentally good and worthy of trust, you must be honest and transparent with them. That includes telling them when they are lagging behind in their performance." Laszlo Bock, former Senior Vice President of People Operations at Google, in his book Work Rules.
Bock details the practices that led to Google becoming a benchmark in human resources, or as they like to call it, People Operations:
"We all want our work to matter. Nothing is a more powerful motivator than to know that you are making a difference in the world."
The best part about the People Operations function at Google is that many of their best practices are forever evolving.
Google constantly learns from data collected from its unique talent pool, all of whom are the best-in-class for each function: sales, product, engineering, partnerships, and more.
Some of the gold-standard practices across Google, retained to this date, are:
1. Hiring the 1% talent pool across functions.
Google's People Operations carefully sources, vets, and handpicks the best-in-class to hire a "great fit eventually," making subsequent performance and appraisal discussions that much easier.
Google interviews are the toughest to crack. They have an acceptance rate of 0.2%.
2. Rewarding, promoting, and recognizing talent based purely on merit.
3. Investing in employees all year round through different skill-based and executive coaching forms.
4. Not giving up on the bottom-performing 5% of employees.
"Having a mission-driven, purposeful workplace also requires that you approach people with sensitivity. Most people who are performing poorly know it and want to get better. It's important to give them than chance."
The performance reviews at Google aim at motivating the underperformers and encouraging the high performers to keep up their excellent work.
There are multiple performance check-ins at Google across all quarters.
Here are the key elements:
So how does this review system work?
At the beginning of each quarter, the top executives at Google set OKRs for the company. OKRs help channel team efforts in the right direction.
"[OKRs are] a great way to help everyone in the company understand what's important and how you're going to measure what's important. It's essentially a great way to communicate strategy and how you're going to measure strategy. And that's how we try to use them.
As you grow a company, the single hardest thing to scale is communication. It's remarkably difficult. OKRs are a great way to make sure everyone understands how you're going to measure success and strategy." Dick Costolo, former Group Product Manager at Google, reflects on what learnings from Google he brought with him when taking over as CEO of Twitter.
Once employees see the company's and their manager's goals, they can easily compare them with a benchmark. This ensures that every employee sets their OKRs in sync with Google's larger objectives so that everyone at Google pushes themselves towards a shared larger goal.
OKRs are visible to everyone in the company on the internal website.
This level of radical transparency eases communication between employees as everyone is aligned.
"It's important that there's a way to find out what other people and teams are doing, and motivating to see how you fit into the broader picture of what Google is trying to achieve. [...] Teams that are grossly out of alignment stand out, and the few major initiatives that touch everyone are easy enough to manage directly." Lazslo Bock in Work Rules.
Leaders hold frequent 1-on-1s at their preferred frequency to discuss these OKRs.
"Google likes to set OKRs such that success means achieving 70% of the objectives, while fully reaching them is considered extraordinary performance. [...] if someone consistently fully attains their objectives, their OKRs aren't ambitious enough and they need to think bigger." re:Work.
2) General focus for employee evaluations
Googlers evaluate each other in the following five criteria:
Employee self-evaluation is the first step in the 360 performance review process.
Employees highlight their accomplishments in the last cycle in the self-evaluation step.
The instructions for the self-evaluation are to list specific projects, their roles, and what they accomplished.
Everyone enters these details in a text field with only 512 characters, which the peers review as part of the subsequent step: peer feedback.
Anonymity: The self-assessment is visible to managers and nominated peers.
Timing and recurrence: the self-evaluation happens once a year in November.
Google's 360-degree feedback gives your managers a holistic picture of their direct employees and eliminates any latent bias. Peer feedback always helps in creating a strong feedback culture.
Employees and managers mutually pick a representative, fair sample of peers to participate in the feedback cycle.
The employee recommends a shortlist approved by the manager that accounts for how well the peer can assess the employee's performance.
Peers use the self-evaluation of the reviewee for reference. But the goal is to ensure that the peers know the project and work of the reviewee, rather than assess the reviewee's summary.
Peer reviewers [are] asked to rate (sling a slider on the screen) how well they knew that particular project and how large the individual's impact was, and to add any comments.
Then, peers rate the employee according to some specific requirements.
"We asked for one single thing the person should do more of, and one thing they could do differently to have more impact. We reasoned that if people had just one thing to focus on, they'd be more likely to achieve genuine change than if they divided their efforts." Laszlo Bock in Work Rules.
Making the peer feedback templates more specific resulted in highly positive results: "Making the templates more specific reduced the time spent writing reviews by 27%, and for the first time, 75% of peers felt that writing the reviews was helpful, up 26 points (on a scale of 100) from the prior year."
Anonymity: Peer feedback is received anonymously, and only managers can see which of their employees have rated the other negatively or positively.
Timing and recurrence: 360-degree feedback happens once a year during the performance review process in November.
Earlier, many of these reviews would happen twice a year. However, employees complained about the cumbersomeness of repetitive cycles. So, recently, they have been reduced to once a year due to dissatisfaction.
Google receives feedback from employees on their managers through a "Manager Feedback Survey." The feedback is collected semi-annually.
The employees' answers are confidential, and managers receive a report of anonymized and aggregated feedback if they get at least three survey responses.
The Manager Feedback Survey consists of a dozen questions based on a Likert scale. Googlers have to agree or disagree with the statements.
Each of the statements measures one of the ten behaviors of successful managers at Google, such as:
The upward feedback survey also asks for confidential (completely anonymous) information from Googlers:
What would you recommend your manager keep doing?
What would you have your manager change?
Anonymity: The upward feedback is anonymous, so the names of the employees who leave feedback aren't visible to the managers. However, the managers can only see the input if three or more people take the survey. Otherwise, it would be challenging to ensure anonymity.
Timing and recurrence: The upward feedback happens in Q2 every year.
For Google, calibration means "it isn't just the direct manager making the decision."
After collecting all the data from self-reviews and peer-reviews and reviewing all employee accomplishments, managers draft a rating for their employees.
This rating is mainly based on OKRs. However, the manager also considers the overall context, e.g., a shift in the economy that might have affected ad revenues.
For the draft rating, managers use the following scale:
By now, managers have only drafted the ratings. Therefore, no rating is final till the end of the calibration process.
In the calibration process, five to ten managers meet to discuss their ratings and finally agree on a fair rating.
"The soul of performance assessment is calibration. It's fair to say that without calibration, our rating process would be less fair, trusted, and effective. [...] [Calibration] allows us to remove the pressure managers may feel from employees to inflate ratings. It also ensures that the results reflect a shared expectation of performance since managers often have different expectations for their people and interpret performance standards in their distinctive manner.
Calibration diminishes bias by forcing managers to justify their decisions to one another. It also increases perceptions of fairness among employees." Laszlo Bock in Work Rules.
Timing and recurrence: The calibration meetings occur once a year in November.
Managers and employees receive a one-page guide to make performance and development conversations more specific and tangible.
For example, the guide covers key areas to cover during the conversation:
Laszlo Bock observes in his book Work Rules, "Those using the discussion guide with their managers rated their performance conversations 14 points more favorably than those who didn't."
The calibration meetings decide every employee's final performance rating for the period.
After the rating is closed, managers conduct two meetings:
Laszlo Bock recommends holding separate conversations:
"[S]plit reward conversations from development conversations. Combining the two kills learning. This holds true at companies of any size. [...]
[The reason why is that] a [negative] dynamic exists when managers sit down to give employees their annual review and salary increase. The employees focus on the extrinsic reward – a raise, higher rating – and learning shuts down. [...] We have an embarrassingly simple solution. Never have the [pay and feedback] conversations at the same time."
These two meetings are a month apart, so the feedback isn't mixed with numbers and is purely qualitative and actionable.
"Traditional performance management systems make a big mistake. They combine two things that should be completely separate: performance evaluation and people development.
Evaluating is necessary to distribute finite resources, such as salary increases or bonus dollars.
Development is just as necessary for people to grow and improve." Prasad Setty, Vice President of Digital Work Experience and former Vice President of People Operations at Google, quoted in Work Rules.
Timing and recurrence: The compensation meetings happen once a year, in December.
In May 2022, the Silicon Valley-based company introduced a new performance development system called Googler Reviews and Development (GRAD).
Google acknowledges that investing in their employees' career progression and holistic development is at the core of their performance management approach.
The GRAD system is a framework that will aid managers in working with employees on their career advancement.
Learning from data from their own company and industry-leading research, the People function at Google designed a leaner process where performance ratings happen only once a year.
As per this new approach, the goal is to actively aid the professional advancement of employees rather than spend excessive time "rating" it.
The critical updates of this change are:
Google is committed to career advancement opportunities for its employees.
All Googlers are eligible for promotion twice a year, including more effortless internal mobility and other ways of aligning their performance with incentives.
"At Google [...] promotion decisions, like rating decisions, are made by committees. They review people who are up for promotion and calibrate them against promoted people from prior years and well-defined standards to ensure fairness.
And it wouldn't be Google if we didn't also rely on the wisdom of crowds. Peer feedback is an essential part of the technical promotion packet that committees review." Laszlo Buck in Work Rules.
Google believes that the updated approach will reveal that most of their employees deliver significant impact daily and are an integral part of overall company success.
By design, and not default, Google's entire People Operations function, from planning to hiring, and measuring performance, cultivates a high-performance culture.
Earlier, Google did four performance reviews until they started doing bi-annual reviews.
A report cited that 47 percent of Googlers thought the previous performance review systems were cumbersome and not the best use of their time.
The new GRAD system encourages employees to coordinate with their managers throughout the year to get feedback and plan career development.
However, they will only receive performance ratings once a year. Google says its new system will "reflect that most Googlers deliver significant impact daily."
Hence, employees can use the saved time to contribute towards company goals.
However, Google continues to enable employees to get promoted twice a year.
Following are the top three reasons why Google scrapped the time-consuming twice-a-year performance review system.
Employees always perform better if they are in a relaxed state of mind.
Two employee reviews in a year were causing people to focus on myopic goals and miss the bigger picture.
The underperforming employees weren't getting enough time to prove their mettle.
A single review in a year would encourage the workforce to set long-term goals and achieve them.
Scrapping the bi-annual review system will save the managers and employees considerable time.
Googlers can use this time to deliver significantly more impact.
Most Googlers are doing great work' and don't need to be micro-managed. This will give the employees a sense of accomplishment and improve their morale.
Confident, well-assured employees are intrinsically motivated and perform better.
"As a leader, it is important to not just see your own success. But focus on the success of others. There are so many people who work so hard and try new things every day. As a leader, we should guide them to succeed. Focusing on the team is one of the most important jobs for a leader." Sundar Pichai, CEO of Google.
Google believes in transparency and uplifting its employees holistically.
The performance review system acts as a compass providing direction rather than a speedometer measuring performance.
"The broad scope of our mission allows Google to move forward by steering with a compass rather than a speedometer." Laszlo Bock in Work Rules.
Google treats its employees as assets and reminds everyone that taking care of your employees is still the best people management strategy.
Here are some direct takeaways for you from the Google playbook.
To ensure employee alignment with organizational goals, goals should be public and ambitious.
This way, everybody knows how and where they fit in the larger picture. Plus, they'll also have the opportunity to know what others are working on.
Google encourages managers to conduct career development check-ins, allowing Googlers to grow with the company.
"What most organizations miss is that people in the bottom tail represent the biggest opportunity to improve performance in your company, and the top tial will teach you exactly how to realize that opportunity. [...] Make development a constant back-and-forth between you and your team members, rather than a year-end surprise." Lazlo Bock in Work Rules.
Google's senior leadership is not cut off from listening to the employees and reducing the frequency of performance rating reviews to once a year.
"[...] having a good manager is essential, like breathing. And if we make managers better, it would be like a breadth of fresh air. [...] What if everyone at Google had an amazing manager? Not a fine one or a good one, but one that really understood them and made them excited to work each day. What would Google feel like then?" Michelle Donovan, Director, People Operations at Google, quoted in Work Rules.
The annual "Upward Feedback Survey," where supervisors receive feedback from their direct reports, forms a critical layer in Google's performance review process.
Managers are ultimately responsible for guiding their teams toward shared goals. Therefore, investing in their development is key to overall company success. Google takes this mandate very seriously, helping more of its managers become successful leaders.
After intensive research, Google's People Innovation Lab (PiLab) concluded that "Googlers with the best managers did 5 to 18 % better on a dozen Googlegeist dimensions when compared to those managed by the worst manager. Teams working for the best managers also performed better and had lower turnover. In fact, manager quality was the single best predictor of whether employees would stay ore leave."
Google believes in making the OKRs of every employee visible to the entire company.
This level of radical transparency, where even a junior employee can view the CEO's OKRs, forms the backbone of a bias-free, meritocratic culture.
Transparently aligning objectives and incentives is just one of the many ways Google builds high-performance teams across the organization.
Zavvy lets you run a performance review process like Google.
The process is simple. Here is a step-by-step breakdown.
You can use the Role Cards feature to set predefined work and mutually agreed-upon KPIs, similar to Google's OKRs.
With the Role cards feature on Zavvy, you can promote transparency and ensure employee alignment in line with business expectations.
Role cards help you define each employee's competencies, skills, and expectations in the company.
E.g., Sales Team, Customer Success Team, etc.
Click "Add Role card" to create cards for each role within each department in your organization.
When defining the competencies, let your managers and team members have an equal weigh-in.
This way, you can create a culture of radical transparency while setting objectives similar to that of Google.
Involve the manager in reviewing role cards and assigning them to each team member.
To assign a role card, click the "Add people" button on an individual role level.
Once assigned, the assignee will receive a notification via email and can view their role card on their Zavvy home dashboard.
With Zavvy, you can easily replicate all of Google's 360 performance feedback cycles: self-evaluation, peer feedback, upward feedback, downward feedback, and calibration.
Here is the step-by-step breakdown of how you can do this.
Choose an exact name so all your stakeholders understand its purpose.
E.g., For a process similar to Google, you can create distinct cycles called "360-degree feedback" or "Annual performance evaluation."
You can choose:
To replicate Google's peer review process, your managers, along with the employee, can select a representative, fair sample of peers who can accurately assess the strengths and weaknesses of the reviewees.
You can create all questions for each of the feedback cycles yourself or choose some from the available templates.
To recreate Google's process, you should include the following questions in the self-evaluation feedback survey and make it as qualitative as possible:
To offer further guidance for the self-reviews, you can add some instructions. For example, Clearly and concisely describe the impact you had. Instead of making general statements, provide specific examples to illustrate your points.
For peer feedback, ensure that ratings are also included and that peers evaluate each other based on strengths, weaknesses, and project contributions.
Here are the questions that you can include:
This way, you can easily replicate Google's approach to peer feedback without any operational hassles.
To replicate the upward feedback survey at Google, simply choose upward feedback and add these 13 statements:
Plus, follow up with these questions to collect more qualitative data:
For the downward feedback, ask this question:
How would you qualify your employee's performance over the last review period?
1. Needs improvement
2. Consistently meets expectations
3. Exceeds expectations
4. Strongly exceeds expectations
Managers will further discuss this rating during the calibration meeting.
Who should see what feedback?
Configure the anonymity settings of your review cycle.
To recreate the Google method:
Calibration is an essential part of Google's review system. So, make sure that you enable the calibration step.
Once the writing phase is complete, the managers will receive a nomination for participating in a calibration meeting.
They will be able to analyze the team dashboard and identify any odd reviews. They will also be able to correct any outliers before the sharing and discussion phase.
Who will be under review? You could select specific departments, teams, or specific employees.
You could also choose everyone in the company with a single click.
Set the deadlines for all the steps of the feedback cycle you configured.
Here are some examples of deadlines to consider for a 360 performance review cycle:
Double-check all the details and activate the cycle.
Once you kick off the new Performance Review cycle, you simply wait for all the feedback to roll in!
Once all feedback comes in and managers complete calibration, it's time for the discussion phase. Now is the time to discuss employee development.
Some more features that make Zavvy stand out in conducting industry-standard performance reviews:
By combining technology with research rooted in the best people management practices, Zavvy can improve performance outcomes across leading organizations worldwide.
Book a free 30-minute demo to see how to craft the best performance review system that enhances your organization's productivity.