While peer feedback is more accurate than a manager's, directly tying numerical scores to compensation "weaponizes" the system, leading to score inflation and reciprocity. Use peer reviews for development and as one of many qualitative inputs for a manager's final compensation decision.

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Move beyond annual reviews by implementing a structured competency model for bi-monthly, one-hour check-ins. This practice removes ambiguity from feedback, makes it conversational and actionable, and creates a continuous, transparent growth loop.

The most selfish thing a leader can do is withhold feedback because giving it would be uncomfortable. In that moment, you are optimizing for your own comfort at the expense of your colleague's growth. High-performance teams require radical candor, which is fundamentally an unselfish act.

At Menlo, peer-driven promotion decisions hinge on a crucial question: "Does the rest of the team perform better when you are part of that project?" This evaluates an individual's value based on their ability to elevate others, prioritizing team amplification over solitary excellence.

Elix mitigates the fear of 360-degree reviews by providing every full-time employee with an external coach. This structure ensures that critical feedback doesn't just feel exposing but is paired with professional guidance, turning potential blind spots into actionable development goals and fostering a true growth culture.

Don't finalize a comp plan in an executive silo. Share the draft with trusted, top-performing reps and ask them to break it. They will immediately spot loopholes and unintended incentives, allowing you to create a more robust plan that drives the right behaviors from day one.

When a manager's evaluation and an employee's self-assessment differ, treat it as a valuable signal. This gap is not a conflict to resolve but a conversation starter to clarify expectations, uncover blind spots, and align on performance standards before formal reviews.

Annual or quarterly performance reviews are high-pressure, judgmental events that create fear. A more effective approach is to reframe management as coaching. This means providing frequent, trust-based feedback focused on developing an employee's long-term potential, rather than simply rating their past performance.

Bending Spoons uses a radical compensation model: fixed salaries with no bonuses or performance-based incentives. The philosophy is that hiring for high integrity and professional pride fosters better alignment than complex incentive systems, which are costly, create perverse incentives, and hinder collaborative problem-solving.

To prevent defensiveness when giving critical feedback, managers should explicitly state their positive intent. Saying "I'm giving this because I care about you and your career" shifts the focus from a personal attack to a supportive act of leadership aimed at helping them grow.

When reviewing 360-degree feedback, look beyond the evaluation itself. A thoughtful, well-structured review from a junior employee, offering both praise and constructive criticism, is a strong signal of managerial potential. It demonstrates the ability to think critically and communicate effectively, key traits for future leaders.