In terms of work environment, employee satisfaction, and overall employee experience, Facebook came out on top of other tech and social media giants in 2018 as per Glassdoor’s top place to work.
Known for connecting people around the world, Facebook fundamentally invented the “social network” as we know it today.
In this article you will learn about:
- Facebook employee performance management
- A breakdown of Fb 360-degree review process
- Why Facebook won’t give up performance ratings
- How Facebook adjusts ratings
- Rules for Promotions and Raises
- Their learning on the way
From connecting to caring, Facebook is not just a social media platform, it is an emotion for millions of people worldwide.
Facebook has come a long way. It has acquired giants like Instagram and WhatsApp on its way up, changed people’s mindset about meeting people online, and adapted to regional languages to expand its geographical footprint.
This growth would not have been possible without a dedicated team of individuals. Nor without a carefully crafted performance review system that is:
- For personal and corporate interests
So how did Facebook find their set of happy and unhappy employees? How did they track employee performance, and what were the deciding factors?
Since much of Facebook’s proprietary technology relies on rating algorithms, it would not be wrong to expect Facebook to have a robust, data-backed, reputation-based performance rating system.
“Our workforce is by far our greatest asset, and we have seen repeatedly that being committed to our people makes our people more committed to Facebook.” Sheryl Sandberg, Ex-COO Facebook.
You will explain, how is Facebook making this happen and how can you quickly implement the key learnings from Facebook?
How does Facebook run performance reviews?
A performance review is a formal assessment in which a manager evaluates an employee’s work performance, identifies strengths and weaknesses, offers feedback, and sets goals for future performance.
“[Performance review] is a process that is designed to recognize, acknowledge, and show appreciation for people who have done really great work. And it’s designed to ensure that you are getting feedback from all of the people that you work with most regularly.” Lori Goler, VP of People at Facebook.
For Facebook, performance review cycles are the way to assess an employee’s value to the organization and make decisions on promotions and salary raises.
Unlike many Fortune 500 companies, Lori Goler, doesn’t believe in getting rid of performance evaluations just yet. Their performance reviews are highly structured and based on a rich input of quantitative data.
In a Harvard Business Review discussion, Lori reveals that they even conducted focus group surveys to understand the employees’ stance on formal performance reviews. Around 87% of the employees wanted to retain the performance review system!
In contrast, Ex-Facebook employees criticized Facebook performance review system which stressed them out, forced them to maintain fake relationships with their colleagues and seniors to receive positive peer review. This shows nothing is perfect, everything has its own share of problems.
Facebook’s 360 Degree reviews
It is a two-weeks long process where employees are first encouraged to send in a thorough self-assessment.
The following vital questions drive the underlying narrative of the review are:
- What was your contribution this year?
- How can you increase this contribution?
After the self-assessment, all employees need to nominate up to five peers to send in a review. Facebook prefers receiving reviews from 5 peers to avoid redundancy. And the peers should have closely worked with them on projects in the last review cycle.
In addition to peer reviews, there is also upward feedback. Direct reports are also asked to give feedback on their boss’s performance.
Once self-reviews and peer reviews are conducted, managers and team leaders sit down and determine a rating of each employee’s performance over the past six months. This classification applies to both promotions and terminations.
Managers scrutinize the feedback to check if the feedback received about every employees is correct and appropriate or not.
Interestingly, the semi-annual performance summary cycle is a checkpoint rather than an investigative and insightful review. So the information conveyed after the performance cycle shouldn’t surprise anyone. “It was a surprise that something had gone terribly wrong,” emphasized Lori Goler.
Facebook does not only focus on manager’s review and feedback. “To break down prejudices and keep things organised, Facebook starts with peer reviews.. They share it with management as well as with each other most of the time. This reflects the company’s core values of openness and transparency. ” Grant, Organizational Psychologist, HBR.
To avoid redundancy, Facebook allows employees to do up to five peer reviews.
Peers on Facebook judge each other based on four factors:
Judgement: This factor impacts your ability to make effective decisions that impacts business which includes both wins and losses.
Execution: At Facebook, management firmly believes that execution trumps a “great idea.” This factor focuses on how employees perform their tasks which is measured on consistency, quality, and reliability.
Crisis management: Facebook employees are expected to exercise a certain level of judgement and effectively manage potential risks, especially in decisions dealing with multi-stakeholder projects and large trade-offs, will be assessed against this parameter.
Learning and development: This factor measures how much employees are willing to and trying to upskill themselves that adds value for their colleagues and the company this is basically understood by matching self assessments and peer reviews..
Performance evaluation and calibration
Calibration is another two week process. Calibration, simply means reconciliation, is a process aimed at making evaluations fair and consistent across managers, departments and even job levels where managers discuss their proposed employee ratings with other managers. During calibration, managers from the teams they work with meet to discuss their peers and self-assessment results.
After receiving self assessments and peer reviews, managers aim to verify information gathered during the cycle and determine where everyone is.
Managers sit and face-to-face discuss their reports, defend and defend, debate and deliberate, and incorporate peer feedback to minimize personal opinion. feedback
To reduce redundancy, facebook prefers peer reviews from utmost 5 employees. Still there can be personal opinions present called “singular rater effect”.
When individual managers are harsh evaluators, or are being unfairly rewarded for being easy evaluators, people aren’t being unfairly punished.” Lori Goler, Head of Human Resources at Facebook, Facebook said Janelle Gale, Head of Human Resources Business Partners at HBR, and Adam Grant, Organizational Psychologist at HBR.
At the end of the calibration, the employee receives her 7-point grade which helps distinguish star players from mediocre players.
Here are his seven levels, from highest to lowest.
Redefine: As the name suggests, employees in this category redefine expectations by not only exceeding them, but doing things well beyond their role.
It is seen that less than 5% of employees receive this rating.
Greatly Exceeds Expectations: Approximately 10% of high-performing employees receive this rating who are great performers but less than the previous category employees.
Exceeds expectations: These are the top 35th percentile employees who not only meet the expectations but earn some brownie points by doing some extra tasks.
Meets all expectations: These are the sincere employees in the top 35th-40th percentile who meet all the expectations put on them but don’t try to shine in the work by performing works not asked.
Meets most expectations: This rating is considered low and Facebook’s future looks bleak. Meeting most, but not all, expectations indicates that employees need to review and improve their performance in the coming months.
This category of employees are given time to work on their weaknesses before the next performance review.
Meet some expectations: This category is scarce but not rare, but these are strong indications that an employee is about to be laid off who is not note-worthy to be given time to work on themselves.
Does not meet: The final level is rare because employees are fired or asked to improve before reaching the final level.
A rating curve graphically represents all employees, showing maximum and minimum values and the full range of performance in between. This rating system effectively creates a high performance culture.
Performance reviews and their ratings have a direct impact on base salaries, bonuses, and promotions.
An employee’s compensation is adjusted according to its classification using a predetermined formula. It’s fair.
To change a bias, we have to say what it is.” Facebook has developed internal bias training that it published as a guide for other organizations.
If you excel, your bonus multiplier increases according to a predetermined equation, no one’s opinion. This allows managers to focus on what they can accurately assess and the company to use its compensation expertise to manage compensation.
It’s also a huge time saver. Even though other companies have eliminated performance reviews, we still spend hours determining compensation.
For us, time spent evaluating performance means time saved for rewards. Lori Goler, Head of Human Resources at Facebook, Janelle Gale, her Partner Head of Human Resources Business at Facebook, and Adam Grant, her HBR organisational psychologist, said: The manager then discusses the evaluation with the employee through 1:1 meeting.
Finally, the employee receives a Compensation Letter with all the details including revised salary and bonuses.
This structured way of conducting reviews, coordinating them and submitting transparent assessments ensures clarity and transparency. Bonuses and raises are carefully considered and there are no “gray areas”.
It takes about 6 weeks for the rating review. This is a commendable achievement for over 50,000 employees across multiple regions.
Frequency of performance reviews
Facebook conducts performance reviews every six months with one taking place at the beginning of the year i.e. January and one in the middle, i.e. July.
Facebook adheres to a semi-annual cycle to ensure employees keep their posts updated and transparency maintained throughout.
5 Reasons behind Facebook’s current performance review system
While some Fortune 500 companies are moving away from performance reviews, Facebook remains steadfast, conducting 360-degree reviews every two years. Facebook adopted a hybrid model after the pandemic.
As lockdowns were gradually eased in some parts of the world, 50% of employees were working in offices.
However, in most cases the manager’s rating and 1:1 In-person feedback calls will continue to be made, but are now virtual for most employees.
All Facebook employees are all around the world, & they have access to internal software, they can share real-time feedback among colleagues.
Also, from late 2022, Facebook is expected to drift from biannual performance reviews to annual performance reviews.
Four reasons why Facebook’s current employee performance management system works.
Improved work-life balance
Though 360 feedback twice a year made giving and receiving feedback much easier, two reviews in a year was too stressful for employees.
The manager said in a year he tried to get his employees to do as much as he could in two reviews, leading to burnout. It meant working on feedback became difficult in a short period of time affecting work-life balance.
When the frequency is reduced to once a year, the whole team is more relaxed and his work-life balance is improved.
Long term focus
Bi-annual performance review, may have forced employees to only set short term goals. By using an annual performance review system, employees can set long-term goals with a 12-month performance review cycle.
Below average employees
Not every employee is able to fulfill their performance target, and rather than letting them go Facebook prefers giving them feedback to work on. And a 12-month performance evaluation cycle gives underperforming employees more time to improve their performance and demonstrate their skills.
A systematic evaluation system gives each employee a complete picture of their strengths and weaknesses and actionable improvement plans.
Most tech companies today can boost the extrinsic motivation of their employees with attractive benefits, packages, incentives and rewards. However, employee intrinsic motivation is not yet widely discussed by performance managers.
At Facebook, every employee has both intrinsic and extrinsic motivation which is quite difficult to split.
Here are some of the many ways Facebook can successfully increase the intrinsic motivation of its employees.
Making them an integral part of the company’s product roadmap and growth path, gives them a strong sense of responsibility.
A holistic feedback culture creates a built-in loop that allows employees to get a realistic picture of their performance on a regular basis and take appropriate actions to improve it.
4 Principles underlying Facebooks’s performance review system
Though Facebook’s performance measurement system is structured and data-backed, Facebook performance review looks at 4 principles
Transparency creates a healthy environment in the company and helps employees trust each other. They foster a culture that excludes politics and toxicity and celebrates constructive criticism.
“People want to know where they stand, and performance evaluations offer transparency.” Lori Goler, Janelle Gale, and Adam Grant.
Investing in employees
Employees form the backbone of a company.
It is important that employees are happy and motivated.
We invest in our people holistically by rewarding them well and enabling them to participate in long-term company goals.
Companies must appreciate employees for their contribution.
Good behavior and skills need to be measured and rewarded, and a structured performance evaluation process does this effectively. Employees in Facebook are appreciated based on peer review on the key questions:
- What was this person’s impact this year?
- How can they increase this impact?
Listening to employees
Facebook’s culture encourages more energy and more formality. Facebook has grown tremendously through a people-centered culture.
Facebook, like its DNA as a social network, conducts many focus groups and surveys with its employees.
Gaining employee insights can help management get an accurate picture of employee needs and emotions. Especially in times of change.
They surveyed employees to understand their perceptions of ratings. We also recently shortened our semi-annual reviews based on employee feedback.
key to Facebook’s performance review success
Here are some Facebook best practices that have led to success which you can try at your company
- Every employee needs to submit self-evaluations and peer reviews.
- Facebook has a hybrid performance rating system. On Facebook, managers read all the feedback every employee receives, check self-assessments and peer feedback alike.
- Internal software plays an important role in tracking informal feedback shared outside the formal review cycle. Reviews are treated like checkpoints, so employees aren’t caught off guard by what’s covered in performance review meetings.
- Managers meet and coordinate the ratings to make sure ratings are assigned fairly & eliminate outliers. Very rigorous or mild tests are noted. Therefore, all decisions are based on factors and complete consensus, backed by unbiased and objective data.
- Salary increases use formulas that save managers bandwidth and allow them to focus on reviews. Raises are given once per year, even though there are two review periods.
The ability to learn is the most important quality a leader can have- Sheryl Sandberg
How to implement Facebook’s performance evaluation approach?
Whether you’re a startup, a medium-sized company, or a large company like Facebook, if you’re struggling with performance and stack ranking systems, Facebook’s approach has what it takes and has proven successful. Do this to implement Facebook’s performance evaluation approach.
Open communication is essential to creating a stable environment for employees. Maintaining company transparency not only creates trust among employees, but also creates space for employees’ personal growth.
Agile performance evaluation process
Traditional performance reviews used to be the backbone of an organization. As your needs change, it’s time to change your approach.
All-new Agile Performance Evaluation focuses on hard-working employees and encourages them to keep growing. Using this approach is beneficial to both the company and the employees. focus on investing in people
People grow when they are recognized, and when they feel heard and valued, they feel a sense of belonging and motivation.
Give employees the recognition they deserve in the form of words, bonuses, or digital rewards to make them feel valued. Acknowledge the top performers and motivate the low performers to push in more efforts.
Develop evaluation processes that focus on employee skills and remove bias. When employees are judged solely on their performance, the company benefits.
Employees want their time and effort to be respected and rewarded fairly. They are one of the most important drivers of your business, so be fair.