Dorsey: ‘No More’ Annual Performance Reviews

Jack Dorsey, CEO at Block and founder and former CEO of Twitter
(image by Newspix/Getty Images)

Feedback is not meant for the end of the year, it’s most meaningful and helpful in “real time” and on an regular basis, says one prominent CEO.

Jack Dorsey, the CEO at Block and former co-founder and CEO at Twitter, is reportedly dumping the traditional annual performance reviews and performance improvement plans (PIP) for something he says is far better.

“Dorsey argues that feedback must be a greater, ongoing investment,” writes Magdalena Nowicka Mook at Fast Company. “He believes feedback must be provided in real time and on a continuous basis rather than just once a year.”

He’s not alone apparently as the research agrees, Nowicka Mook detailed.

“A 2019 survey from Work Human Analytics & Research found that 55% of workers do not believe annual reviews improve their performance. When something isn’t working, we must look at solutions to fix the problem,” she communicates. “The resources spent on annual performance review should instead be invested in regular check-ins and strong hiring practices—methods that are actually proven to advance employees’ development.”

Communication Intelligence magazine will examine three Dorsey points on the matter — and throw in a bonus point of discussion.

Dorsey point 1:

“This is the last ‘annual performance review cycle’ we'll have. It’s way too heavy for everyone involved and it doesn’t actually help us get better,” he wrote.

What he is going to do instead is have his leaders observe and coach immediately when needed.

“Performance should be continuously evaluated, and feedback should not be queued up for later,” Dorsey said. “There are natural and asynchronous milestones that are specific to individuals and teams, like launches or product completions, that will force our leads to be more specific and personalized with feedback, promotions (which need to be dramatically simplified!), compensation, or whether to part ways immediately (instead of letting things linger).

“Of course, there are things like calibration across disciplines that require a synchronous action, but everything else should default to asynchronous — and personalized to the individual. We’re working through how this will work in practice.”

Communication Intelligence: Dorsey wants to do what is best for the organization, clearly, yet he is conveying that he thinks this approach will also be better or best for (figuratively speaking) the players and leaders above them on the hierarchy.

Why? Because only ongoing assessments and coaching can maximize talent and lead the organization where it wants and plans to go. While he hasn’t yet defined the process, that is a priority on the agenda and will get worked out.

Dorsey point 2:

“We’re going to introduce performance ratings that will be visible to each individual employee. Everyone deserves to know where they stand and how to improve. This will help both the individual and manager have a conversation, and gives us more insight into how well the manager leads their people,” Dorsey writes.

“We’re going to start with 3 ratings which will replace the compensation designations we’ve used in the past. The clearest and fairest way I think about these is through expectations: ‘I meet, exceed or fall below the expectations set with my lead (exceeds, meets, below).’ That ensures we can have a fair two-way conversation holding each of us accountable to always raising the bar.”

Communication Intelligence: Employees do not always understand, with clarity, “where they stand” or “how to improve.” That is always assumed or worse, ignored or poorly communicated as a leadership responsibility.

Dorsey isn’t vague either about how this will be done. He doesn’t go into depth yet he does explain the general evaluation or grading structure.

Is that method entirely objective or subjective or finely tuned in both as a plan? Who knows for certain. Hopefully those details about metrics will be communicated promptly, concisely and clearly for members of the organization.

Dorsey point 3:

“As we have a clearer and continuous understanding of where each of us are, we’re going to end Performance Improvement Plans (PIPs) in the US,” Dorsey expressed. “We haven’t seen these plans actually work consistently, as they often feel too late and don’t push the manager to give feedback in a timely manner. It’s a lazy and often surprising approach that we can avoid with direct and consistent feedback.”

Communication Intelligence: The proposed mission to gain a “clearer and continuous understanding” is always a noble, wise one that allows for better decision making. Putting a stop to anything that isn’t working or at least consistently is smart, considering this decision is not premature about a new process that didn’t get a chance to prove itself. It’s antiquated thinking being replaced with a process, a game plan so to speak, that could.

Dorsey seemingly has identified the weaknesses of the “PIPs” which he says is that they are late and reveal suboptimal communication between management and their people. In fact, Dorsey calls it “lazy (ouch!)”

He doesn’t just complain though, he believes the on-time, continuous feedback and coaching, as well as the grading with directness and consistency, can be the elegant solution.

Dorsey talked about leadership and what it entails.

“Leading is a privilege with immense responsibility,” he said. “If we don't have the right leaders and can’t evaluate them against an ever-increasing bar, everything suffers. We will not tolerate mediocrity or low performance from our leads. You have my commitment that we will hold a very high bar to all of them, and act extremely fast if things are clearly not working out.”

He made sure to humbly include himself.

“And of course...that includes me. As I do every year, I’m sharing my annual performance review with you all (attached). Read if you wish,” Dorsey wrote. “I’d focus more on the direct feedback quotes than the narrative (which sounds way too positive to me). Summary: folks want me to work on 3 things this year: driving results, decision making and being more inclusive across business unit lines.”

Communication Intelligence: Dorsey said what so many people working under leadership believe, that having such a position is a privilege and not an opportunity to act superior and beyond reproach.

It is, he points out, about responsibility, not only to the mission but I’d contend he’d agree that this includes the commitment to conducting oneself ethically, professionally and respectfully, as much as competently.

Dorsey is correct that substandard leadership performance means “everything suffers.” In short, he communicates with understanding about the need for quality humans and quality performers. That he adds he will “act extremely fast” in the event that “things are clearly not working out” is important. It’s a commitment and Dorsey knows it.

Focus though on the word “clearly” as that means there is room for debate and argument. It’s subjective, meaning not everyone may agree on “clearly not working out.” Hopefully not but that is a possible situation.

No one expects Dorsey to be in any trouble if his performance is considered by company team members but that he says that he too is going to be evaluated and he will share what people say about him is communication and an act that is important to notate and give the benefit of the doubt for now that Dorsey doesn’t want to be an ivory tower leader.

Him detailing what people did say about him — the areas they want improvement — is a worthy start to the new performance review process.