Performance reviews, promotions, and firing: running the system.

A new hire gets their first review after 30 days. After that, every person is reviewed every three months. Four reviews a year, per person. That is the whole schedule.

The review has three parts and nothing else.

1. 1

   Goals

   Measurable. Two or three per person, specific to their role.

2. 2

   Core competencies

   Same for everyone. Same every review. Non-negotiable.

3. 3

   Role competencies

   Specific to the position. Written at each seniority level.

A goal is something you can look at and say yes or no. Not “do a good job”, not “try harder”. Numbers, percentages, dates.

Setting goals well is its own topic. For now, the essentials: every employee needs clarity on what their goals are, a reason to want to hit them, and agreement that they are fair. The goals must be relevant to the position and easy to measure.

Two or three goals. Give someone ten and they will focus on none of them.

Use descriptions instead. Each level tells the employee exactly where they are and what the next step looks like.

• Not there yetLevel 1Needs constant support and guidance to do this.
• Getting thereLevel 2Shows this sometimes, but not consistently yet.
• SolidLevel 3Does exactly what we expect at this level.
• Already above this levelLevel 4Ready for the next step.
• ExceptionalLevel 5One of the best I have seen at this. Sets the standard for the whole team.

The same five levels apply to core competencies and role competencies. You pick the level, you write a note explaining why, and then you have a conversation. The note is the part most managers skip, and it is the part the employee actually reads.

Here is a real example of the document a manager hands over. Sales rep, mid level, reviewed in March by their sales manager. Goals first, then core competencies, then role competencies.

Goals set at the start of the quarter.

Core competencies. Apply to every person in the company. No exceptions, no levels.

Role competencies: sales. Each one lists the four levels so the rep can see the next step, then the manager’s assessment.

Handles objections. When the customer pushes back, turns a no into a conversation.

Follows up. Keeps every lead warm. Never lets a serious prospect go cold.

That is the whole document. It takes a manager under an hour to fill in properly, and the employee leaves knowing exactly where they stand and what the next level looks like.

Three consecutive good reviews. That is the rule. If one review is not satisfactory, the count resets and you are looking for the next three in a row.

1. 1

   Core competencies: solid or above

   No exceptions. This is the gate.

2. 2

   Role competencies: all at “Already above this level”

   And nothing below solid in any of the last three reviews.

3. 3

   Then you promote

   Into the next level, with the salary range that goes with it (more on that below).

Some companies promote once a year, in January. So someone hired in June waits a year and five months to be considered. That does not work. People who are performing do not want to wait that long, and the good ones will not.

Make the timeline specific to each employee. They join, you review every three months, and you are looking for three consecutive good reviews. A high performer who joins in March and does well can be promoted by December. Someone who needs a few months to settle might take a year. The same system handles both.

If someone is underperforming, you coach them for 30 days. Clear expectations, a clear timeline, and clear consequences, all written down. If it is not corrected after 30 days, you let them go.

That is not harsh. It is honest. They knew the expectations from day one. They saw the competencies. They had the reviews. There are no surprises on either side.

Here is the biggest problem you will run into. Your managers are the ones running this system, and people are inconsistent. One manager is generous: everyone on their team exceeds expectations. Another is strict: nobody ever scores above solid. Now you have two departments with two different standards.

1. 1

   Keep departments separate

   Do not compare across them. A “solid” in sales and a “solid” in operations are scored by different managers with different standards.

2. 2

   Run the system on the managers first

   They need to feel it on their own reviews before they run it on anyone else. Consistent reviews for them, then for their teams.

3. 3

   Make fair reviewing a manager competency

   Rate managers on how consistently and fairly they run reviews. It becomes something they are evaluated on.

4. 4

   Review the reviews

   At least in the beginning, do not let managers review their team without you reading the reviews. Calibrate until the scoring lines up.

A raise should never be one vague thing. There are three types of salary increase, and when you mix them nobody understands why they got what they got.

1. 1

   Inflation increase

   Not a reward, not tied to performance. Every person gets this every year, no exceptions. If you skip it, you have cut their pay in real terms. They did not get worse; the money got worth less. This is the minimum.

2. 2

   Promotion increase

   Tied to the competency system. Each level (junior, mid level, senior, manager) has its own salary range. When someone moves up a level, their pay moves into the next range.

3. 3

   Performance increase

   Bonuses tied directly to results: a bonus per job booked, or a commission once closing rate passes a threshold. Pay-to-play is common in moving and works fine. The rules just have to be the same for everyone and stay the same.

Turnover is the share of your team that leaves or gets replaced in a year. Twenty people, four left: 20% turnover. Track it separately for the office and for movers, because they behave differently.

• Above 15%Red flagSomething is wrong. Run a survey, find the problems, get this down.
• Around 10%HealthyLow performers leave, new talent comes in, the system is working.
• Under 5%Also a problemNothing is moving. No new people, no new ideas. It feels safe, and it is how a culture goes stale.

Once the culture is gone, the employees start running it, and the version they run is rarely the one you wanted. Put culture first, even when it works against a short-term goal. This is where your productivity comes from: job satisfaction, identity, the feeling that this place is different and means something.

The moment you compromise a core value for short-term revenue, you send one message to every person in the company: the values were never real. And once people believe that, you cannot unbelieve it for them.

• Review new hires at 30 days, then everyone every three months. Three parts: goals, core competencies, role competencies.
• Two or three measurable goals per person. Numbers, not adjectives.
• Score with described levels (not there yet, getting there, solid, already above this level, exceptional). Never 1 to 5.
• Promote after three consecutive good reviews. Core competencies solid or above is the gate; all role competencies at “already above this level”.
• Timelines are per person, not per calendar. A high performer can be promoted in nine months.
• Underperformance gets 30 days of written coaching, then a decision. Core value violations are immediate.
• Calibrate managers: separate departments, review them first, make fair reviewing a competency, read their reviews.
• Three raise types, kept separate: inflation for everyone every year, promotion into the next range, performance bonuses on results.
• Healthy turnover is around 10%. Over 15% means problems to fix. Under 5% means nothing is moving.
• Protect the culture even when it costs short-term revenue. It is the one thing you cannot rebuild.