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Johnson & Johnson's head of performance management shares how the company revamped its review system to be more compassionate and conversational

Published by Business Insider on Mon, 03 May 2021

<p><img src="https://static1.businessinsider.com/image/60807b7ac36a8a00185c63ba-915/johnson &amp; johnson covid vaccine.jpg" border="0" alt="johnson &amp; johnson covid vaccine" data-mce-source="Jakub Porzycki/NurPhoto via Getty Images"></p><p></p><bi-shortcode id="summary-shortcode" data-type="summary-shortcode" class="mceNonEditable" contenteditable="false">Summary List Placement</bi-shortcode><p>Donna Scarola was already planning to simplify and streamline Johnson &amp; Johnson's performance-review system when COVID-19 hit.&nbsp;</p><p>The pandemic, which forced the drug manufacturer to quickly shift gears into vaccine developmentupending the company's strategic plans for the year and employees' work lives along with it, didn't derail her project. Rather, it inspired Scarola, J&amp;J's global head of performance management and leadership, to go deeper.&nbsp;</p><p>The result: a review process that's more compassionate, more conversational, and places a greater emphasis on the employee's growth. "Our theme is less documentation, more conversation," Scarola said. "We want to move away from the idea that being busy equals performance. Our focus is on the quality and impact of one's work."</p><p>J&amp;J is one of <a href="https://www.gartner.com/smarterwithgartner/3-steps-performance-management-delivers/">a growing number of companies</a> that are reimagining the performance-review process for the post-pandemic world. Some, including J&amp;J, are doing away with the tedious, document-heavy, once-a-year meetings of yore, and are replacing them with more frequent, less formal feedback sessions focused on development.&nbsp;</p><p>There's still uncertainty around how performance reviews will change moving forward, said Anna Tavis, a professor of human capital management at New York University. This is because companies are unsure of how their culture may change with some employees in the office, some working a hybrid schedule, and others fully remote.&nbsp;</p><p>"A lot of big, structural changes are still in the making," Tavis said.</p><h2><strong>Ditching formal goal-setting discussions</strong></h2><p>In the immediate aftermath of the shutdown, Scarola said her first priority was to impress upon employees that whatever they thought they would accomplish in 2020 was now out the window. Prioritiesboth personal and professionalwould have to be different.</p><p>Formal goal-setting discussions between managers and their employees were out; frequent conversational check-ins were in.</p><p>"We needed to step back, forget about documenting goals, and instead make the process more of a conversation: 'How can your manager support you' What do you need to be successful''" Scarola said.</p><p>Even as the pandemic loosens its grip in some areas and employees trickle back to the office, managers are encouraged to embrace the role of coach, Scarola said. "We want them to ask, 'Where do my people need support''"</p><p>Another immediate change revolved around paperwork. As part of the previous performance-review process, J&amp;J employees were asked to record their achievements of the past year. And many employees documented their every accomplishment.&nbsp;</p><p>But this year, the company placed a 140-word limit on the question to simplify the process. "People used to write pages, and now they write a few bullet points or a paragraphjust highlights," Scarola said.</p><p>Going forward, she said, these two changes are here to stay: Employees can expect five manager check-ins per year focused on performance, and the 140-word limit remains in place.</p><h2><strong>Connecting performance scores to pay</strong></h2><p>Like many other companies, J&amp;J has long given employees a numerical score as part of their review. The scale runs from one to four. In the past, one indicated the employee didn't meet expectations; two meant the employee partially met expectations; three signified the employee fully met expectations, and four indicated the employee exceeded expectations.&nbsp;</p><p>An internal study found that three-quarters of employees said they liked ratings, but that they didn't understand how the numbers connected to their pay. What's more, Scarola said, the short descriptors didn't sit well. A rating of three was respectable in theory, but some employees said working hard all year only to learn they had "met expectations" was demotivating. "It didn't feel good. They felt average," she said.</p><p>This year, J&amp;J introduced a new nomenclature: One is minimal, two is moderate, three is strong, and four is exceptional.</p><p>It's a small shift, but one that's helped employees reframe how they feel about their job performance. "We expect our employees to do well, and we are a high-performing organization," she said. "If you achieve your goals, you aren't average. You are strong and capable."</p><p>The company has also adjusted its bonus pay scale. In the past, employees ranked as threes received 80% to 120% of their target bonus. But employees were left scratching their heads when one year they'd earn 99% of their bonus and the following year they'd earn 97%, Scarola said. "They'd wonder, 'Are they sending me a signal about my performance with my pay''"&nbsp;</p><p>This was not the company's intention, so now all employees ranked "strong" automatically receive 100% of their target bonus. "The employee experience needs to be consistent," Scarola said.</p><p>Scarola added that she and her team were doing research to make further improvements to the review process. For example, they were investigating the way J&amp;J uses technology to nudge and capture squad or team-based performance, as opposed to solely individual performance.</p><p>The objective, she said, is to encourage collaboration and teamwork: "We want to help people come together and get better at their jobs."</p><p><a href="https://www.businessinsider.com/johnson-and-johnson-changed-performance-review-process-during-pandemic-2021-5#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="https://www.businessinsider.com/doomsday-prepper-million-dollar-condo-converted-missile-silo-2019-3">Inside a $3 million doomsday condo that can sustain 75 people for 5 years</a></p>
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