How do companies who implement continuous performance decide on salary increases, promotions, variable pay, etc?
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looks like this one is a bit of a challenge to answer. I’ve added it to next weeks Geekly as the question of the week to see if we can get some input for you!
By continuous performance, do you mean, the removal of performance ratings? Companies like Adobe have ditched ratings and annual performance reviews in lieu of more “continuous performance management” where employees and managers chat about performance more often during the course of the year. In such instances where there is no performance rating, companies expect managers to decide how to allocate salary increases, promotions and variable pay. I’m not sure what kinds of checks & balances they have to ensure managers are not peanut buttering the equity equally among everyone vs. implementing pay for performance.
Others who have moved away from annual ratings end up doing multiple smaller reviews during the course of the year and add all those data points as input for compensation and promotion decisions.
Hope this helps.