Open-sourcing Our Talent Management Systems
How we define employee success is influencing our company culture
Good people are fundamental to growing a company that collaborates across country governments, technology providers, and financiers. So much so that it is one of our core values - “put people first”.
In the East African startup market, there is a regular debate around competing with telcos and banks for top talent and paying top dollar versus hiring young and building within. There are many ways to dissect this question, which I’m excited to go into in a future post, but regardless of where your answers fall, we’ve found this gnarly and messy topic of performance management to be key to ensuring the success of staff.
On a personal level, I’ve seen the destructiveness of talent being unfulfilled at work. I’m a big believer in Simon Sinek’s just cause, where we “imagine a world in which the vast majority of people wake up every day inspired, feel safe wherever they are, and end the day fulfilled by the work they do.” Ultimately, getting talent management right is a priority for me. I hope by sharing some of Sanivation’s systems and our decision process, it will be helpful for others to stimulate a conversation around clarifying expectations and evaluations of your talent.
Have we got it right? Probably not. Have we learned a lot? I think so. One of my biggest (yet maybe obvious) learnings is that the definition of talent within an organization is a key lever to permeate culture and norms.
In this article we share:
Our talent management system
Core competency framework
We’ll share how this talent management system ties in with how to carry out performance reviews in a future article.
Looking at talent management through the lens of an entrepreneur.
We set out to solve three problems:
How do you clearly define success for everyone within a company, and particularly for eager talent in their first job?
How do you equitably determine role level across a team of 50+ with employees having varied experience (1-20+ yrs) and education level (none to graduate level)?
How do you transparently communicate and justify salary bands across a workforce that requires people to specialize in certain skill sets?
The more we delved into this concept of talent management, the more we realized a few core concepts.
Many of these problems have been solved before. Everyone does it differently. And yet, there is still no clear toolkit on how to do this well.
The way you do it helps set the culture of the company.
The systems we gravitated to integrate “talent management” throughout the employee’s lifecycle from recruiting to reviews to separation.
Sanivation’s Three Categories Within Talent Management:
Business Competencies: How skilled are you in company-wide competencies?
Functional Skills: How skilled are you in your area of focus?
Performance Management: What were your results in contributing to company goals?
What was our rationale for the split into three categories?
The traditional evaluation for employees is Performance Management. However, we realized that for a growing company, not only are the current results key, but competencies for future results are just as important. Therefore, we define Talent Management as the comprehensive set of clear expectations and evaluations for guiding work and growth for our employees at Sanivation.
A critical component for Talent Management is how the employee is contributing to company goals. Therefore, evaluating how the employee performs is still a part of our Talent Management system.
To guide and evaluate growth at Sanivation, we use Business Competencies, a framework that defines expectations of levels across the company, regardless of specialty area. The goal was to provide transparency for all colleagues on what is expected at their current level, the level ahead of them, and what expectations they should have for their supervisor or direct reports.
At the same time of wanting clear criteria across the company, we wanted to delineate how different skills were needed in different areas of the company. We also wanted to be able to transparently reward individuals that brought a specific technical skillset. This is where we use Functional Skills, where each Functional Area Lead identifies the skills needed for that area of work.
Business Competencies
Here is how we define business skills with our core competency framework. Give it a look; we’d really love feedback! The framework is guided by our core values on the left and levels along the top. We took a Russian Dolls approach, where everything nests on top of each other, meaning a core competency of 5 has the levels (dolls) of 4, 3, 2, 1 included. This is not a new concept and there are many different competency frameworks out there.
We were very intentional about nesting our business competencies into our core values. Within each core value, we have business competencies and sub-competencies. This nesting process forced us to break down these sometimes fuzzy core values into simple and specific definitions that help us codify this within our organization. For example, we broke down Passion for Impact (a core value) into two core competencies: Strategic Decision Making (bases decisions on data and has a clear rationale for the why) and Fostering Innovation (strives for continual improvement).
In addition to helping us permeate our organization's values, we use the business competencies to:
Determine someone's level and salary band based on their average core competency level
Focus professional development conversations on specific elements in a core competency
Help justify the appropriate level for a new position and then assessing if a candidate exhibits these skills during the recruitment process
Lastly, it’s a strategy tool. The core competencies of Sanivation may look very different than other companies. By clearly defining them, it helps set the skills we see as important for the company to succeed.
Functional Skills
This was a fun one. We simply asked each functional leader to define what are the key 3-5 skills for their function. Overall, these functional skills are important to provide guidance on how one becomes an expert in product development versus operations. We then set goals for where they can improve and areas to focus on over time. Supervisors and employees rank themselves yearly on a 1-5 scale:
1. I do not have any ability in this skill. I have a basic understanding of what this means.
2. I have basic ability in this skill. I need lots of support and guidance to do this well.
3. I have adequate ability in this skill. I can operate at my level with minimal support.
4. I am good at this skill. I can operate at my level with no required supervision.
5. I am an expert at this skill. I perform continuously above my level in this skill.
Performance
Performance is based on results achieved. Expectations on performance are set through Annual Business Planning with KPIs and OKRs (objectives, key results). Evaluations on performance are based on the planned vs actual results where results = the results of you + the results of your team + the results of functions you interact with. Supervisors use a standard 5 scoring system to evaluate results for their direct reports where:
5: Exceeds Expectations by far – The employee achieved truly amazing results
4: Exceeds Expectations – The employee is working well above what is expected from most people in this position, seniority, and salary
3: Meets Expectations – The employee is doing a great job and occasionally exceeding expectations, while occasionally there’s room for improvement
2: Below Expectations – The employee is struggling to meet expectations. Sometimes the expectations are met, but there’s a strong need for improvement
1: Insufficient – The employee is not meeting expectations for the role. The situation needs to improve significantly
So how does this all come together in the review score?
This all comes together in the review process and in an individual’s “review score”. A review score is weighted respectively across these three criteria: Performance - 50%, Business Competency- 30%, and Functional Skills - 20%.
A review score can be calculated by taking:
Performance Score/5 *50% + Business Competency Score/Level * 30% + Functional Score/5 *20%.
Assuming someone has the following scores - Performance 3/5, Business Competency at their current level e.g. 4/4, and Functional Skills 3/5, their review score would be 72%. Then 72% becomes the standard expectation for annual review scores. Scores over 72% should be rewarded (promotions, raises, bonuses, etc.) and scores under 72% should be reviewed and modifications made (adjustments in expectations, additional support, performance improvement plans, etc.).
Beyond annual reviews, these performance scores are vital to setting professional development and succession plans as they clearly communicate the current and expected skills of each employee.
Did we solve our problems?
So far, while I am sure it has many faults, we see the system has been working. I look forward to feedback and more conversations.
As a reminder, the problems we were looking to solve (with our answers) were:
How do you clearly define success for everyone within a company, and particularly for eager talent in their first job?
Combination of Business Competencies, Functional Skills, and Performance Management.
How do you equitably determine role level across a team of 50+ with employees having varied experience (1-20yrs+) and education level (none to graduate level)?
Business Competencies that cut across the company and Functional Skills that are specific to a functional area.
How do you transparently communicate and justify salaries across a workforce that require people to specialize in certain skill sets?
Clearly link salary bands to Business Competency Levels and link salaries with a review score that combines the three elements of talent.