Modern Performance Reviews Adopted By Top Companies

Modern Performance Reviews Adopted By Top Companies
  • OKRs (Objectives and Key Results)
  • Management by Objectives (MBO)
  • 360-feedback
  • Continuous Feedback
  • Stacked Ranking


What it is?

OKRs (Objectives and Key Results)

High-level goals (Objectives) and specific steps to achieve them (Key Results). Keeps everyone focused.

Management by Objectives (MBO)

Setting goals together and working towards them. Helps align personal and team goals with the company's.

360-degree Feedback

Getting feedback from different people (like bosses, peers, and others) to see how you're doing at work.

Continuous Feedback

Regularly talking about how things are going at work. Helps make quick adjustments and keeps learning.

Stacked Ranking

Ranking employees based on performance. Used to decide rewards or promotions. Can create competition.

Objectives and Key Results (OKRs)

Objectives and Key Results (OKRs) is a goal-setting framework that has gained popularity in the business world for its effectiveness in aligning teams and driving performance. OKRs are typically set and tracked regularly, often quarterly, and consist of two main components: Objectives and Key Results.


  • Objectives are clear, concise, and qualitative statements that describe what an organization, team, or individual aims to achieve. They are aspirational and provide direction, answering the question, "What are we trying to accomplish?"
  • Objectives should be inspirational, ambitious, and directly linked to the organization's overall mission and strategy.
  • Objectives are usually few (3-5) to maintain focus and ensure clarity.

Key Results:

  • Key Results are specific, measurable, and quantitative outcomes that indicate progress toward achieving the corresponding objective. They answer the question, "How will we know when the objective is achieved?"
  • Key Results are the measurable benchmarks or milestones that serve as indicators of success. They provide a way to assess and track progress objectively.
  • Each objective typically has 3-5 key results associated with it.

While OKRs offer various benefits, including enhanced focus and teamwork, there are potential drawbacks. One significant risk is the use of inappropriate key performance indicators (KPIs) to measure targets.

Utilized by: Adobe, Amazon, Dell, Facebook etc.

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Management by Objectives (MBO)

Management by Objectives (MBO) is a management philosophy and goal-setting framework that was popularized by management theorist Peter Drucker in his 1954 book, "The Practice of Management." MBO is designed to improve organizational performance by aligning individual and team objectives with the overall goals of the organization.

It's like making a roadmap for everyone. We set clear goals that make sense for the big company picture. Everyone helps decide these goals, so we all feel part of it.

Think of it as building blocks - each person's goals fit into the bigger company goals. We talk a lot to see how we're doing and fix things if needed. At the end, we get rewarded for reaching our goals. It's a continuous process - always getting better by talking and adjusting our goals. It's like teamwork with a clear plan.

Performance is evaluated based on the achievement of objectives. This provides a clear and objective basis for assessing individual and team contributions.

MBO encourages linking performance to rewards and recognition. Employees who successfully achieve their objectives are rewarded, fostering motivation and a sense of accomplishment.

Regular evaluations and feedback sessions help identify areas for improvement and adjustment of objectives.

Utilized by: Hewlett-Packard, Xerox, Intel, etc.

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360-Degree Feedback

360-degree feedback, also known as multi-rater feedback, is an assessment method that gathers input from various perspectives to evaluate an individual's performance. Unlike traditional feedback, which typically comes from a supervisor, 360-degree feedback involves input from different sources, including peers, subordinates, and even self-assessment.

  • Involves feedback from various sources such as supervisors, peers, subordinates, and sometimes even customers. This provides a comprehensive view of an individual's performance.
  • Individuals often assess their own performance, offering their perspective on strengths and areas for improvement. This self-awareness is valuable for personal development.
  • Responses are usually confidential, encouraging honest and constructive feedback. Anonymity helps ensure that contributors feel free to share their opinions openly.
  • The individual receives a detailed report summarizing the feedback. This is often followed by a discussion or coaching session to interpret the results and create an action plan.

360-degree feedback is widely used for leadership development, employee growth, and fostering a culture of continuous improvement in organizations.

Utilized by: Netflix

Continuous Feedback

Modern performance reviews prioritize continuous feedback over traditional annual or semi-annual evaluations. This shift involves frequent check-ins, occurring weekly, bi-weekly, or monthly, to discuss progress and address challenges. Real-time feedback is a key component, allowing for immediate adjustments and a clear understanding of the impact of actions. The focus is on aligning feedback with individual and team goals, promoting purpose and direction.

Communication is two-way, encouraging employees to share their perspectives, while positive feedback and recognition are provided regularly to boost morale. Skill development is integrated into the feedback process, with managers identifying areas for improvement and supporting growth through resources and training.

Continuous feedback offers the advantage of keeping employees well-informed about their performance, enabling them to make necessary adjustments. However, the main drawback lies in the potential increase in time demands on managers and supervisors.

Utilized by: Adobe, Delloite, Uber, etc.

Stacked Ranking

Stacked ranking is a way companies compare their employees and put them in different groups. Stacked ranking provides a clear distinction between high, average, and low performers. This can help employees understand where they stand and what is expected for career advancement.

The best performers get rewards, like promotions or bonuses. But, the lower-ranked employees might face consequences, even losing their jobs.

It uses both objective (like numbers and goals) and subjective (like judgments from managers) criteria for ranking. However, the stacked ranking has faced criticism for creating competition and a stressful work environment. Some companies are moving away from it, choosing more collaborative and supportive methods that focus on coaching and skill development.

Stacked ranking can make employees unhappy and might lead to more people leaving their jobs. It also raises legal concerns about fairness and discrimination. Many companies are now trying different ways to evaluate performance that are more positive and fair.

Utilized by: Amazon, IBM, Google (for promotions only)

Did you know!! Some companies also implement psychological appraisals, that are great for uncovering your employees' hidden talents. This approach is well-suited for the current workforce landscape. Instead of just looking at past work, these appraisals concentrate on future performance. They evaluate seven aspects: interpersonal skills, cognitive abilities, intellectual traits, leadership skills, personality traits, and emotional intelligence. A skilled psychologist utilizes thorough interviews, psychological tests, and private discussions to evaluate an employee comprehensively.