Comment by LaserToy
Can anyone talk about a better model?
Some things to consider: 1) The company needs a way to weed out folks who are net negative. In general, if someone is not playing their part, there should be a mechanism to evict if up-leveling fails. 2) The company needs a way to distribute incentives (bonuses) as fairly as possible.
The major problem I see with these "performance reviews" is putting everything into the same bucket: feedback, compensation, career ladder progression—which I could go on about, but this isn't the point I'm trying to make.
In the end of the day, what _really_ matters is if people are getting compensated fairly compared to their peers. Sure, some people like to play the power game and get excited with becoming a "newly-made-up-title-that-sounds-important-but-I-dont-get-paid-more". But these people are only playing a game, very likely unawarely, that was already set by the company.
It all comes down to how a company lays out its incentive models. And, truth be told, the vast majority of the software companies out there do a terrible job at it. The people in "charge" don't know better and end up replicating what others do: a Taylorist approach (https://en.wikipedia.org/wiki/Scientific_management). It goes without saying that, for a company that requires knowledge work, this isn't the best approach. A lot of perverse incentives crop up (https://en.wikipedia.org/wiki/Perverse_incentive).
A better model, from my perspective, is one that dissociates feedback from compensation. This usually goes hand-in-hand with a more transparent culture; with self-managing and self-organizing companies:
- https://en.wikipedia.org/wiki/Maverick_(book) - https://www.reinventingorganizations.com/ - https://mooseheadsonthetable.com/ - https://www.humanocracy.com/
Team-set salaries is one that I like a lot. Unfortunately, it isn't as wide spread. Here's a few more resources on it:
- https://www.percival.live/post/team-set-salaries-tss - https://www.infoq.com/news/2022/03/tss-company-wide-compensa... - https://www.youtube.com/watch?v=M1rMMmO_iO0
Hopefully I planted a few seeds.