Performance reviews are often seen as a necessary evil of corporate life. A colleague of mine used to call them the “annual ambush” – the time of year when his former manager would pop in seemingly out of nowhere to unleash all their criticism on him and disappear, only to be heard from the next year.

An ambush is the exact opposite of what a performance review should feel like. They are supposed to help you understand how you’re contributing to the overall success of the company and identify growth opportunities for the coming year.

Cognitive biases influence performance reviews more than you might think.

Unfortunately for many people, they’re too little, too late, and not holistic enough. The experience often leaves people feeling lots of unwanted emotions – anger, frustration, self-doubt, reduced motivation, and perhaps worst of all, that the assessment itself was unfair or biased.

This can be especially true for underrepresented minorities or women, who often experience cognitive biases and stereotypes first-hand. For example, we know that women who exhibit leadership behaviors are often characterized as “bossy” while their male peers showing the same characteristics are considered “leaders” and often times promoted as a result. And black employees have been told to dampen aspects of their personality that come off “aggressive” as compared to a white colleague – something more rooted in stereotypes than actual experience. Another common bias that pops up is when companies over-emphasize delivery of results and ignore behaviors that can take a toll on team health and company culture (some refer to this as rewarding the “brilliant jerk”).

It’s not just direct reports who feel the performance review pressure. When we surveyed our own managers at Atlassian, they told us they needed more direction about how to evaluate their direct reports and how to deliver feedback.

All of this research and feedback compelled us to test a new performance review framework, focused on continuous improvement and a fair and bias-resistant process.

Our new framework – and how it’s combating bias

To build effective teams, you have to prioritize much more than just individual performance. According to research we’ve conducted, teams that understand how their work connects to the bigger picture and have a strong sense of connection with each other are happier and more effective. It doesn’t get much better than that!

In order to create the most holistic view, we separated our performance levels into three assessment areas which we weigh equally when creating our performance ratings:

Expectation of role

Contribution to the team

Demonstration of our company values

This performance system is also designed to mitigate the cognitive biases that affect managers’ ability to fairly rate each person’s performance. Research shows that unstructured or non-specific review criteria are most likely to create biased assessments, so we introduced detailed descriptions of the behaviors and impact associated with each performance level. Our experiments also showed that by rating values, role, and team contribution separately, we avoid the halo effect, where performance in one area unnecessarily influences ratings in other areas. We were especially conscious to ensure no “brilliant jerks” were given a high rating. We have also implemented audits and interventions into our calibration process to mitigate bias.

We want to reward employees based on their full contribution to the team, not just their individual impact.

Taken as a whole, our new performance indicators reward employees based on their full contribution to the team, not just their individual impact. Our goal was to create a system that recognizes and rewards employees for work that often goes unnoticed or unaccounted for. This can be especially true for traditionally underrepresented groups who tend to volunteer for (and in some cases, are assigned) a greater percentage of work related to team building such as planning team offsites or leading community lunches for employees of color. By including team contribution into our assessment, we’re ensuring that everyone is equally incentivized to contribute to their team environment and are recognized for doing so.

Finally, a holistic performance review encourages employees to bring their authentic selves to work. Knowing that you will be measured not only on your skills but also on your contributions to the company culture, or your willingness to support a colleague going through a hard time, makes for much more engaged employees.

Here is how we measure each of our new performance indicators.

Expectation of role

This is standard in most traditional performance reviews (and often makes up the entirety of the assessment). It measures whether the employee fulfills the expectations of their role, focuses on the right work that delivers against strategy, and contributes quality work that meaningfully impacts customers. But we’ve expanded this definition to consider whether someone has gone above and beyond by identifying gaps in plans and helping to course-correct, taking on stretch assignments to grow their skillset, and inspiring others to greater levels of performance. Our definition of “individual performance” is intentionally weighted to include amplifying the work of others.

Contribution to the team

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The next assessment pillar is an employee’s contribution to the team, which measures the degree to which they seek opportunities to elevate their teammates’ impact and overall team performance, take a team-view when solving problems, and foster an environment of trust and belonging.

Contribution to the team looks like finding ways to celebrate the team’s collective success, actively working to ensure team alignment and clarity, driving improvement in our team culture and practices, and more. And these aren’t just nice to haves for us; as the TEAM company, we believe the highest levels of performance are achieved when employees look for ways to positively impact their teams.

Demonstration of values

Atlassian’s five company values are at the core of all we do. We collectively strive to live by the values, make decisions that are in line with them, and interact with our customers and each other according to them. Why wouldn’t we then bring values into our performance assessments? And it’s not just a one-off instance or a focus on a single value, it’s about consistently living all of the values.

Here are examples of how we look to see each value lived out.

Value Example Open company, no bullshit – Communicates transparently and constructively while taking accountability for their mistakes

– Naturally places trust in others and listens to everyone’s ideas regardless of role and seniority

– Assumes positive intent first and gathers context instead of speaking in absolutes Build with heart and balance – Brings passion and genuine care to the work and how they relate to others

– Sees the bigger picture and seeks to understand the broader impact before taking action

– Gets shit done but finds the point of diminishing returns and doesn’t chase perfection Don’t #@!% the customer – Empathetically listens and acts on customer feedback

– Anticipates the customer’s needs and takes potential customer impact into account in making decisions/tradeoffs

– Shows a willingness to be part of the solution Play, as a team – Seeks input and buy-in from others

– Creates opportunities for others to share their voice and makes sure teammates feel valued and included

– Actively looks for opportunities to help others even if “it’s not my job” Be the change you seek – Constructively challenges the status quo

– Brings a process improvement approach, involves others, and offers alternative solutions

– Perseveres through difficult challenges and drives to a conclusion when initiating change

How it’s going so far

We rolled out our new performance review process over a 12-month test cycle to ensure that employees and managers could provide feedback on the new reviews, and confirm that it was a fair and actionable assessment for all involved. We’re happy to share that our testing showed no measurable bias built into the structure of the performance review.

And our employees are already benefitting, with early feedback results showing a 10% increase in understanding of how individual performance is being assessed and a 9% increase in feeling that the feedback from the performance review will help employees improve their performance. We’re constantly evolving, and looking to drive continuous feedback year-round, in addition to the annual assessment cycle, so stay tuned to see more from us in this area.