Beyond Ratings: Performance Without the Box (Shirvani Mudaly, CPO at Lightspeed, and Kahina Ouerdane, CPO at Workleap)

Speaker A: More often than not, most of the effort at the end of the year goes into managers justifying why the employees goals moved. The company made a different decision. We did this. So it's all just subjective stuff at the end anyway. Goal posts change and it should change. You should be agile and change your goalposts. If things aren't working beginning of the year as a KPI, it's likely it's going to change by the end of the year.

Speaker B: Welcome back to Leading Culture Building the Future of Work. I'm Kehino Ehrdan, Chief People Officer at Workleap. I've always built, believed in the power of collective intelligence. How people coming together can create something greater than the sum of its parts. And that's exactly what this podcast is about. We're having real conversations about what it takes to lead in today's workplaces. Today I'm joined by Shravani Mudali, Chief People Officer at lightspeed. With 20 plus years of experience across tech, finance and media, Shivani has an impressive track record and is known for scaling culture, building high performing teams and, and leading with purpose. Under her leadership, Lightspeed was named one of Montreal's top employers in 2024. Hi, Shravani.

Speaker A: Hello. How are you?

Speaker B: I'm good. I'm so happy that you're joining us today. Thank you. Thank you for making the time. Um, you and I have had a few conversations, um, in the past year and one of the topics that I think we're both really passionate about, and I really want to take a stab at that right away, is the topic of performance management. I think that there's no HR leader who's indifferent to this topic. I want to hear your thoughts on our side. We've tried a lot of things throughout the years. Some have worked, some have not. Uh, we have a very ambivalent and complicated relationship with the concept of ratings. And I think that you do too. And I want to hear your thoughts on this. Yes or no when it comes to ratings for performance management?

Speaker A: Yeah, that's a really good question and it's quite a complex topic and it has changed a lot over the years. Uh, in the time I've been doing human resources, I have seen ratings being the be all and end all. I've seen it disappear and companies move away from it and I've also seen it come back. So maybe I'm a bit old in this space, but, uh, if you ask for my personal opinion, if I have to get off the fence, I think I'm a no ratings and not as Binary. When I say that answer and what I mean by that is I think it's super important in a company to always identify your top talent, your cream of the crop, who probably drive your strategy forward, who, um, you know, do uh, the most dull, shifting pieces of work to actually make the company go from here to here. And I also think it's really important and good hygiene to always look at poor performers. I know it's hard to say, but people who aren't quite the right fit or the right skill set for the roles they're doing, um, and to help them be um, on another journey. Right. So those are really important. I think when I say I'm um, no to ratings, I think it's that, it's that middle group. It's, it's kind of your um, if you have a traditional one to five scale, it's your threes and fours. And I feel like having ratings and boxing people in like that is really not productive. Like, you know, what's the reason you do it? For me, a lot of companies anchor their compensation philosophy on ratings, uh, whereas I've got a mindset of look, let's just pay to market. So you use your market data to advise on your ratings. Sorry. To advise on your compensation. And uh, that's really clear. Now if you want to pay for performance, you know, if you know who your key amazing people are, you can also layer on additional compensation. So I think it solves for the. That part.

Speaker B: Yeah, yeah. Because I was going to say because we've been talking a lot about this internally as well. And then we, we were in a model uh, that you just described and then we were seeing some people getting maybe a bit demotivated because they were strong performers many, many years ago. I'm talking and not necessarily seeing their compensation being linked to it. So maybe there was like a layer that was missing. And that's what you're kind of saying.

Speaker A: Yeah, yes, I mean I say for sure. Uh, I think you, you layer on for the high performing people on top of your compensation framework, um, which is really getting to true pay for performance. Um, yeah. What else? Uh, can I say? I think um, you know, if you don't have ratings, I talked about the compensation part. Right. But the other part is how do you know if people are doing well? And for me I don't subscribe to only, you know, twice a year or uh, maybe people do it quarterly, uh, to have these formal conversations to tell you if you're on track or not on track. I believe in regular Good quality conversations all the time with your manager.

Speaker B: I believe in that too. However, once we've said that in reality things are more tricky and some people are not having those conversations regularly and some people are not providing the constructive feedback because it is hard and because things are going fast and because we have tons of really good reasons not to get there. So how do you bring people to have those meaningful, constructive conversations on an ongoing basis?

Speaker A: Yes, absolutely. So I have done this once in the past or actually twice in the past. Uh, and how I've achieved that when I've got rid of ratings is replaced with these good quality conversations. But it's not just we just say it to our people, leaders. We uh, defined what a good quality conversation was and it's got three elements which if you want me to go into detail I can. There's three elements of it. Um, and then we stood up some significant investment in training, in how we got our leaders to understand that, to get upskilled in that and then actually mandate them doing it. And that was extremely successful. And just very quickly, the three elements I would say is part of a good quality conversation is managers setting very, very clear uh, goals for their people and not the traditional annual KPIs though

Speaker B: I was just going to say that's something that's hard for a lot of leaders or a lot of managers setting goals. And some people will have a type of work that would command goals on a weekly basis and others maybe on a quarterly basis and this could change within the same team. So tell me more.

Speaker A: Took the words out of my mouth. So the reason we say goal setting on an individual basis rather than the traditional KPIs you have once a year and you get rated against is because exactly what you just said. You might have a, um, a goal that's a three week goal because that's the project you're working on right now. I might have a six month goal because I've got a much longer um, uh, a more complex project I'm working on now. Managers need to be quite tailored to uh, so you're clear what you're doing by when, I'm clear about what I'm doing by when. And those that first part of that conversation is given the clarity about what they're supposed to be doing, clear about timelines and execution and in those regular check in conversations you want the manager to focus on how you're tracking, have you got any roadblocks, has any performance issues, uh, all the time. Again, not just at the end of a project. Or once a year, um, for formal review, just quickly. The other two parts of the conversation or good quality conversation is about development uh, of the individual. So we want our leaders to always open up a space for development conversations. Now if you're having a weekly one on one, you're not going to talk about development every week. You might only add that bit in once a month or once every two months on that element. Uh, and same with the last element which is two way feedback. I think if a manager and employee can get um, comfortable and I guess trained on having good uh, feedback conversations to each other, it's that foundation of trust that gets built and honestly like to me that's the fundamental. Any high performing team, if you've got trust across the team or trust between a manager and employee, uh, it to me is table stakes to then having a great relationship and high performing team.

Speaker B: So when you talk about two way feedback as being like the third component of a, ah, valuable conversation, are you referring to conversations, two way feedback between an employee and their manager? Are you talking also about feedback amongst employees, peers, stakeholders? How do you see that?

Speaker A: Right. Uh, in this context I'm talking about manager and employee. Uh, I've got a strong view we should have a strong feedback culture for sure. But in this context when I'm saying, you know, again, you don't have ratings, um, what do you replace it with? You replace with great quality conversations and that two way feedback is one element of a great quality conversation with your manager.

Speaker B: I have so many follow up questions because here it's really part of our day to day, uh, thoughts. Um, you're talking about building a culture of feedback now how does that happen? I mean we've been working on this for years. I know a lot of people are trying to build that. Um, people come from different walks of life, different cultures, different work cultures. People are much more comfortable doing that than others. Um, what have you experienced in that sense and what has worked for you?

Speaker A: Yeah, uh, it's really hard to do I would say and it makes people feel very uncomfortable and uh, expects them to step out of their comfort zone for majority of people. Right. And when you work for a global company as well, there's a lot of cultural nuance there. Right. So what's normal, uh, for someone that's like myself from New Zealand or Kiwi, that can probably be more comfortable having a transparent conversation versus someone that's maybe in Tbilisi, a uh, Russian background, who are probably a lot more conservative in how they want to give feedback, especially in hierarchical layers it's challenging, but I think the uh, answer is to lean into it. You make a decision, you want a cultural feedback, then you start talking about it, you name it, you provide upskilling and you force people out of their comfort zone, uh, a little bit. And if you just do that and you are consistent, it eventually sticks. Right. Anything you're consistent about adding to your culture eventually becomes part of it. Ah, as long as you don't just launch and forget.

Speaker B: Mhm. It's interesting, um, throughout the years, as I was saying, we've been experiencing different types of performance, uh, management cycles and at some point we did not have ratings. So just like you mentioned before, we took it away and then brought it back. And uh, when we had taken it away, it had to do a lot with our vision around the fact that we want people to be, to have intrinsic motivation rather than carrot and stick. And that, that is, that pays off better in the long term. Uh, however, we live in a world where there is a lot of short term gratification and a lot of short term, ah, carrots and sticks. So um, I'm curious to see when you did, because you told me that you did it twice to kind of remove the ratings from work environments. What emerged, what did you observe, what changed?

Speaker A: I think what changed was less anxiousness from our staff around the performance rating, end of year conversations. Because what happens, I believe, again, I'm talking about those threes and fours, right? If you're a poor performer, hopefully you know, before the end of the year you're a poor performer. If you're a superstar, you probably also know you're a superstar. And we will identify, like I said, these people and reward is appropriate. Uh, I think what it changed was majority, uh, of the organization, so probably about 80% of your organization coming to the end of year conversation in like an away state, like you're coming to prove yourself to your manager around what do I do all year, uh, how do I justify to you, um, that I should be at, you know, the highest rating I could be. And even, even the mindset is, it's, it's, it's odd from the beginning, you know, because they're coming in to approve something. Right. Whereas if you're having these regular, regular conversations and you come to the end of the year, you already know how everyone's tracking. You can truly have a genuine conversation about how your year went, what's your focus for next year and there's less tension about uh, putting you in a box and a number against you and for what reason? I almost, I almost don't understand why we have to say, Karina, you are three. For all these reasons. And also from my experience, managers hate having those conversations. Even they feel forced to have this rating. And then they hate telling someone or you are three. I'm gonna tell you why you're three and why you're not a four. And it's really difficult.

Speaker B: The way I see it is that it's kind of a plan B in my view. And I have to be honest, we currently have that system internally. And the reason why, um, and I think that when I say it's, it's a plan B, if you cannot truly implement the feedback culture that you're referring to, um, I feel like it's the second best thing in the sense that it provides clarity. And you know, as Brittany Brown says, being clear is being kind. And that's something that people are craving for clarity. Right. Am I meeting expectations? What were the expectations? And, and so it kind of provides, um, guidance. It's not the best way. I agree with you. Personally, I've just found it very difficult to implement it differently. But it's true that at least it gives some things. The other thing that I'm thinking of, and maybe it's not a good reason I'm, um, being transparent, is that at the executive level, there's an interest to have access to the data points right out of our business, like what's the percentage of our people who are three or a four or a two. And that provides. And I'm not saying that it's bad or good. I'm also noting though that in an, uh, executive setting, and you know that as well as I do, having tangible quantitative data to share makes things real.

Speaker A: Of course.

Speaker B: And clear. Yes. And when you don't. And I'm thinking also about engagement, like, you know, we have surveys and we do, and that helps a lot because we have qualitative and quantitative data that we can bring to the table at the exact level. And right next to the ARR conversation and the billings conversation, we can also have those conversations. So maybe that's one pro I would argue.

Speaker A: Look, uh, I agree, but I'm a big fan of if you're going to collect data, you've got to do something with it. And I would almost argue that what do most companies do with the data on the threes and fours? So again, the low performers we should, in a good, healthy way, take action on. Most M companies should do that. Uh, again, your really key people probably get the opportunity to get into more projects. Hopefully they get a paper performance kind of link. Um, but with your general mass, even if you do rate them generally we don't stand up much investment or programs against that. Uh, so I don't take that away. So we've got our cream of the crop rating at the moment is we call it change makers at lightspeed. And we do invest in that every year we've got a whole paper around. Okay. This is what we want to provide to our change makers to retain them, our poor performers. We want a plan to actually lift them up. And if that doesn't work, obviously, um, we should part ways. Uh, but we don't take then material action on the middle group. And so again that's half my point. We are we collecting data or giving ratings for um, a big group that we then don't take action? Now I'm not saying everyone doesn't do that. I'm just saying I haven't or um, companies I've been on. So that's why another reason I look if you collect data you've got to do something with it.

Speaker B: So and I guess many companies what they do with it is that they link it to compensation. Right? That's their action item. I would say now is it good or bad? And then it goes back to the intrinsic and extrinsic motivation piece uh, that I find tricky. But it's true that I think a lot of people use it in that way. You know, um, yeah, it's very interesting. You were talking about the fact that you were intentional about bringing a feedback culture and then you would upskill people and you would create programs to help people. Can you get a bit more into details of that? What does it mean to upskill people to be able to have good conversations?

Speaker A: So like I said when we uh, labeled it great, uh, quality conversations, we defined literally three elements of it that I outlined before and each one had a module of upskilling. So the first one is the most important about giving that clarity, purpose, which um, I know you want to talk about that today so it could be a good segue. But giving that clarity and purpose to an individual uh, is first and foremost do they know why they come to work, why what they're doing when they need to get it done by how it links to the company. Ah, strategy is critical. And so uh, we literally just had training and upskilling around teaching leaders how to do that. Um, uh, same with the development, um, opportunities for staff. We trained on that and the two way feedback. We trained on that and we keep retraining. And the only thing we overlaid over all of this was um, mindset. So we introduced uh, models that worked really well around um, you know, growth mindset, around the scarf model, you know, um, to help things. And that kind of uh, overlaid the whole program. And so it was quite a defined program. And it was one of the most dull, shifting things I've done for leadership because we put so much effort into it. And it wasn't just a course you go on or a training session you went on and you Forget about it 10 minutes later. It was fundamentally changing how they liaise with the employees on a daily basis. And that's the most powerful thing I've seen today that, that I've personally done.

Speaker B: And what was the impact on employees? What did you notice? I mean you said there were less anxiety. There was less anxiety, yeah. But aside from that, did you notice any.

Speaker A: What I noticed was uh, yes, of course, less anxiety at a rating, uh, period. However, also execution like cadence, people were very clear about what they were doing. Um, they got support earlier. Managers could performance manage better. Uh, execution of velocity, of getting work done was better because again it was just um, that regular conversation all the time.

Speaker B: Mhm. It's interesting because one of my takeaways of this conversation we're having right now is like the importance of like tailor made approach. You're talking about some employees will have goals for three weeks, others will have for three months. So that means that there's no one size fits all when it comes to let's say follow up conversations even maybe and when we talk. Right. So but I think it's interesting because you're in a company, how many employees at Lightspeed?

Speaker A: 3,000.

Speaker B: 3,000. See, so you're able to, I don't know if you're doing it exactly this way at that scale, but it's interesting to just fathom the idea that maybe it's feasible and instead of trying to find the cookie cutter, which is something I'm just thinking out loud because it's making me think about stuff. But maybe it is not more work to do it in a variable way depending on your direct reports. But I think that we're so used to doing, uh, trying to have find a systematic approach that will work for all. And maybe that's also one of the shortcomings.

Speaker A: Yes. And when I've seen it in the past, you know, I've been in you know like banks and things like that where you set the annual KPI, you uh, get measured at the end of the year. And I would say more often than not, most of the effort at the end of the year goes into managers justifying why the employee's goals moved. The company made a different decision. We did this. So it's all just subjective stuff at the end anyway. And the admin that goes around that, that process when and especially when you're in tech, uh, goal posts change and it should change. You should be agile and change your goalposts if things aren't working and therefore people's priorities, if it was set at beginning of the year as a KPI is likely it's going to change by the end of the year. So again, if you're just stuck in this traditional, I'm telling you at the beginning of the year what you need to do these three things in 12 months time, it's probably changed.

Speaker B: Yeah, yeah, yeah. And then life is what happens while you're busy making other plans and then you made your strategic planning and then life happened and then you're readjusting anyway.

Speaker A: Corre. Yeah, yeah, exactly.

Speaker B: Another topic that I think you and I have in common, uh, because we've talked about this already, is the importance of being purpose driven and mission driven when I think finding our own work, uh, leading teams and so on. In the previous episodes we spoke with Mike Ross about meeting of work, meeting at work, meeting in work. It was a super interesting conversation we were having. I'm curious to hear you like the practicality of things, um, and maybe I can also share a little bit about what we've experienced. But how do you help, uh, or how do you catalyze or enable this approach of being meaningful in the work and helping people find their purpose in work or at work?

Speaker A: I think that employees finding purpose in a company is an interesting concept, a very important one. Of course I also think it's always not the um, employer's responsibility. So what I would say, uh, to any of my friends that talk to me about this, I would say, you know, choose the company you want to be at. Right. So choose a company that you ah, are passionate about what they do and uh, most importantly do you align with their values. Right. And what they're trying to achieve from a, from a um, product perspective, if it's a tech company or um, and also as a values on how they think um, about the customer or how they think about employees as well. So I think that a lot of it I think should be on individuals to make that call. I think with that employer lens, I would say our responsibility is to provide clarity. Are we providing a good, clear vision and mission? We're just about to launch a new one for Lightspeed, uh, and as a result, also launch a new employee value proposition around. Why come to Lightspeed? Why stay at Lightspeed? And I think it's our jobs as uh, executors of the company to make sure people want to be there. They're clear about why they want to be there. They're excited about the future. So the vision is exciting and. And repeat that all the time. So everyone that comes to work every day, that contributes, they know their work matters every day towards the mission of the company. And so I don't know if I'm answering it, uh, in a way you expect, but, yeah, just. Just having a clear vision and mission is really important, but also anchoring, if you even want to be there. Employees also need to want to be there.

Speaker B: It's very interesting because this is kind of circling back to my conversation with Mike Ross in a previous episode when we were talking about the difference between meeting at work and meeting in work. And so meeting at work is pretty much what you just talked about. The company that you're joining. Right. The values of the company, the fact that the employee has to make the choice about the company they join, what the company can do to make it clear and to disseminate that information. And then there's the other part, which is the meaning in work. You know, I'll give you an example of myself. I used to be a lawyer. If I had been a lawyer at workleap, I would be miserable. Even if the values aligned with me, maybe I would have stayed a bit longer because I didn't like being a lawyer. So the meaning in work was not there for me, while the meaning at work, let's say, would have been there for me. So I think that it's really interesting to kind of, you know, join the two.

Speaker A: Agree.

Speaker B: Uh-huh. And then how do we help people realize that and. Yeah. Shed light on what they're interested in, uh, and to what extent.

Speaker A: Absolutely.

Speaker B: Is it the company's responsibility and the employees?

Speaker A: Yeah. And I think what I would say to that, you know, how I talked about this great conversation managers should be having? And the second part was around development. Uh, I can't tell you how many times I've sat down with my own, uh, people and asked them questions around, you know, if you won the lottery, would you still be doing this job? And the answer is no. I want to help you find what that is. And I've Actually done that. You know, I've worked with someone who wants to be an executive coach and in her development plan was her plan to start her own business. And so again that I think managers can be such a powerful asset to helping people, uh, understand whether they clock it themselves or not, whether the role's right for them, whether they're enjoying themselves. And I talk about that often, you know, like, uh, helping people make a decision if the role is not right for them is also. Or the company's not right for them. That's a really powerful thing to do for a human. And not thinking about people who are just employees.

Speaker B: Yeah, it's true. And I think that it also pays off for the company as well because having people and I mean, I've always, always made the joke, but if I had worked half the time that I work now when I was a lawyer, I wouldn't have had four burnouts just because I was not getting energized by the type of work I was doing. 100%, you know, so it doesn't help the company either to have people who are currently dragging themselves to work every day. Um, so you've mentioned a few times you've talked about learning and development. I've heard you talk about that ever since we started the conversation. So I'm curious to hear your thoughts on internal mobility in my company. We've been talking a lot about this lately because on one, it is always very, we're very drawn to the external talent in a way because they've done things elsewhere. They're going to bring in their expertise and their knowledge and, and maybe they'll do copy paste and whatnot. Right. And at the same time, we do have internal talents sometimes that just need a bit of a Runway to be able to get to the next stepping stone, to be able to provide a, uh, lot to the company while already being aligned with the values already knowing and maybe also from transferring departments being able to bring on their knowledge. So it's like philosophically completely obvious that this makes sense. And yet in practice sometimes it is tricky and difficult. So I'm curious to hear your thoughts on that and also, how do you put it in practice in your organization?

Speaker A: Of course, I think leadership, um, has got a responsibility around providing development opportunities for their people. Right. And you know, I think about development as wider, not just linear for promotion. So that's really important. So I would always anchor on making sure any good company gives all these opportunities and upskilling for their people. For sure. I think about mobility though, it's really nuanced and it depends on the company and where they're at in their journey. So if you are a far more stable company, just say you're a telco, you've been around for 80 years growing talent internally. Given the opportunities, you've probably got far more patience and time to be able to do that. Right. You've got really steady, um, probably revenue streams. You're very sophisticated. I think if you're in smaller companies or more startup vibe or you've got a challenge and you're really trying to win, I think companies don't always have the luxury to only take the time internally to develop. So I think while we should always have a lens of rewarding our great people and giving opportunities, I definitely think at times, if you're under pressure and you've got something new or a new strategy, you don't want to wait five years for someone to trial and error to get to that skill set. You want to buy in that skill set. Right. Someone who's seen the movie before that has got all the learnings already and they come in and they can take us from here to here really quickly. And I think it's a balancing act. So it's where the company's at in their journey, but then also the role. You know, if you've got a really dull, shifting role, we've got to act fast on. I will probably anchor on buying in the talent. And it's hard. And then at times where you can take the opportunity to slow down and grow to reward a really great person, we would do that.

Speaker B: But it's interesting because we're talking about buying the talent. And of course I very much agree with you that at times that's the way to go about things. And at the same time, I've also seen very many instances in which, um, we glorify a little bit. The copy, uh, paste, I'll call it that way. I've done it elsewhere and I'll just do it here. And we know that that's not the way organizations work. And if I can do an analogy with my former life as humanitarian human rights lawyer, I would see people who had, let's say, worked in the Congo and then they were living. I was in the. I was living in Haiti at the time. And they'd be like, ah, I've seen this. I was in the Congo. I'll just copy paste and I'll bring it to Porter Prince and it will be fine. Absolutely not really. Um, the history is different, the culture is different, the Taboos are different, the traumas are different. And I feel for me, an organization is a little society in itself. I know and you know and yeah. So I find it. It's fascinating. And at the same time I have a colleague who always says, like, experts can also be conservative because they know. So they come in and they. And it's not true for everyone. But there's also like, um. There's like a risk also associated with that.

Speaker A: So 100.

Speaker B: Yeah.

Speaker A: I think again, depends on level. And uh, I'll talk about at an executive level for a minute. I think if I. And I know this is not relevant to everyone, but I think how I think about buying in the talent or the skill set. It's about someone who can come in, listen to what the company needs and draw on the experience to help develop something. I agree with you on the copy paste. I can promise you. Any person has come into lightsfeared and didn't want to listen for a minute and just copy and paste did not work out. It did not work out. And so I would say that for, um. I guess that's how I'd answer that. Do you mean like, you don't want someone that comes in and can't even listen? But I think that's what you look at from an interview process. You go, is someone bringing the experience? Um, and they can use that experience to help us navigate versus they're just going to come in, I know it all.

Speaker B: And copy and paste, therefore, do they have openness? Can they listen?

Speaker A: Absolutely.

Speaker B: Truly listen? Can they nuance things like. Those are all skill sets that we have to look for, for sure. Absolutely. Thank you so much, Irani, for the time.

Speaker A: I really appreciate it. It's been great.

Speaker B: Thanks.