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Propelling performance reviews: How a Kiwi software company has blended holacracy with technology to empower the workforce

The future of performance reviews is here: an evidence-based digital badge system, which nurtures employee skills in a non-discriminatory and usable way. Auckland based software company Propellerhead seeks to challenge normative structures with innovative and alternative business models, notably its new digital badge system which will be introduced in early 2018 – a feature which aims to make traditional annual reviews irrelevant and remove workplace biases such as those towards gender, race, and religion.

Performance management differs for companies of different shapes and sizes, with different strategies working for different companies. So could a digital model really provide a holistic solution to performance reviews?

Digital badge systems are trending within the realm of performance reviews. Global companies such as IBM, Microsoft, and NASA have subscribed to the digital move.

Currently, companies are moving away from the outdated annual appraisal model. According to Forbes Magazine, only 55 percent of employees feel as though the appraisal system is effective. Arguably the most common alternative is the 360 performance review model, which provides informal, individual and interpersonal feedback from peers, employers and managers.

For many companies, the 360 approach to performance reviews has provided a plausible solution: the HR arm of companies. However, operations lead at Propellerhead Jonathan Cupples says the 360 performance review system is “time consuming, messy and still very much dictated by how people are feeling on the day, which the digital badge system could replace outright.”

In 2012, the Mozilla foundation built an original digital badge system which allows employees to earn, issue, display and understand badges based a range of skill sets. The digital standard places autonomy in the hands of employees who can verify and validate particular skill sets with a digital badge.

Since IBM deployed the digital badge programme, it has issued over 500,000 badges, with 87 percent of IBM staff saying they are now more engaged with the company.

New Zealand-based Propellerhead has now created an alternative app using Mozilla’s framework, launching in 2018. The app is connected to the cloud and provides a database for users to attain badges based on key skills that will contribute to their specific job.

 “It’s an evidence-based award that we will verify as a company to say somebody has done something or has a really valuable, critical skill. It provides a way of formalising that for internal benefit – it is also usable where employees can go onwards and upwards with it for their career,” Cupple says.

Subsequently, a badge provides clear evidence that the recipient has an ability in a particular area. The badge system can also recognise both technical and soft skills which contribute to the company.

“There is a real big focus on evidence and what employees have done. It can be as simple as reading a book or an email - while other examples might be participating in a course, or established trustworthy experts who already have the skill to vouch for me,” Cupple says.

Propellerhead has a flat organization structure which has no hierarchal governance – a feature which is central to its philosophy in generating enterprising software solutions.

The new digital badge system reflects its holacratic values – a reward system which empowers employees to verify their key skills based on evidence.

 In light of Propellerhead’s launch next year, Cupples toys with the idea of world domination, but concedes that in its current form, the app is more suited to companies already using holacracy.

 “We would be starting with holacracy-based companies because if they are using holacracy, we would get valuable feedback for how they could use it in different ways to us,” he says. “There is no way we can predict where it would go, so that is why at the moment we are focusing on our own internal use to get something solid and usable.”


Propellerhead's offices

Additionally, Cupples says digital badges can clarify matters for employees, as well as provide transparency of tracking performance.

“It will allow employees to very clearly prove what they know and what they need to do to up-skill, increasing their salary in the process,” he says.

“Transparency would sum it up in one word: on one hand, the transparency of information that you need as a person to go about your job really well, and what it is worth to the company.”

Cupples describes the iterations Propellerhead have made to allow the digital based badge system to solve wider issues.

“A lot of the ideas we have used have been established and have been out there for a while, but we haven’t found something we have been able to use as a business. We could sign up to the open badges system and use the same thing but there is no way we could tie it back to salary or personal development or professional development because there is nothing out there like that and it has been really awesome that it’s the business owners that have driven the decision and the passion to do this and create a company that does holacracy because it is a really awesome place to work.”  

Notably, Propellerhead is still developing the software and is focused on testing the app on its own internal system.

“The user interface is still ridiculously ugly, so that will need a complete redesign –  all of the focus is on how to surface the elements that we need and think are important, at the moment, internally all of our staff members are in now, nobody has access to it, it’s an admin level thing and we are currently matching people up to roles.”

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