With the end of the year fast approaching, we wanted to talk about performance reviews… or rather, why we got rid of them!
At Lü, we’ve adopted a similar philosophy to a pro sports team. Every team member, regardless of their position, level, status, or personality, is an important player in our success. And we felt that performance reviews (and linking them to raises) simply didn’t fit with that mindset. If we’re all important to the team’s success, we all deserve the same pay adjustments.
Pay adjustments
To that end, we’ve created a pay structure where positions fall into different job classes based on pay equity criteria¹. Employees are then evaluated based on their experiences to put them in a specific stage within their job class. All employees move up a stage each year. Depending on the company’s success, as well as inflation and market trends, we may also decide to add a blanket percentage increase for all job classes. It’s important that our salary structure be fair and representative of everyone’s responsibilities so that “review” meetings aren’t tied to raises. That’s allowed us to eliminate performance reviews in favor of development plans.
Development plan
Like a sports team, we must ensure that each player is in the right position and that the coach is giving the right training to prepare them for the season. For that reason, we’ve implemented development plans and dialogue moments. The development plan is a document that each team member completes individually after reflecting on their strengths, what they want to improve and how they intend to contribute to the company’s success. The plan is also used to discuss career goals, training needs, and suggestions for improvement. This plan, combined with at least 4 annual meetings with the director (called “dialogues”), is an opportunity for frequent and ongoing discussions, immediate feedback, coaching to help our team members develop, and better understanding of each team member.
And although we take the time to look at the hits and misses of the past few months, we focus more on what’s ahead.
We’re not perfect
This approach was implemented 2 years ago, and we’re always looking for feedback from employees to help us improve while meeting the needs of the company and its team. For 2023, we’re working on improving the development plan document, setting up a support service to help managers accomplish and document the plans in a way that suits their needs and realities, and supporting more follow-up on the development plans and potential/useful training.
Another important project we want to implement in 2023 is the career path program for people who want to advance professionally. The program will identify the knowledge and skills that individuals need to acquire in order to progress. It will also help us establish a clear plan to foster the development of these skills in the medium and long term. Our forward-looking management of jobs and skills also allows us to identify future talent needs within the organization. That way, we can already identify potential replacements and promote employees’ advancement within the company.
Finally, we know it’s important to never assume that everything we’ve implemented is permanent—everything changes. We stay attuned to management needs and trends, then adjust course to help everyone succeed and make sure our actions have added value.
¹ According to the CNESST, pay equity is “the right of workers in a typical female job to receive pay equal to a person in a typical male job of equivalent value in the same company.”
