Why Quantico does appraisals and pay increases every 3 months - and you should too

Like it or not, the world of work has changed since the pandemic. People want different things from their jobs - and if they can’t get them where they are, they’ll go elsewhere.?

Getting this right is so important to us at Quantico. Not only because it makes good business sense, but also because our mission is to build more fulfilling careers for accountants.? For us that means three things: variety, impact and progression.?

Fortunately for us, working with startups means that variety and impact are easy to achieve.? Progression, however, is something we haven’t always got right.?

When you’re trying to build something new making mistakes is nothing to be ashamed of, what’s important is how quickly you learn from them.? In this blog we explain the process we went through and the radical changes that came out of it.??

We hope that sharing our process will help you make changes in your own company ??

The story so far

When you join Quantico, it’s likely that you’ll progress very quickly. Why? Because you have to.

Today the vast majority of accountants start their careers doing old fashioned training in very large organisations.?It gives you a good theoretical background but in my experience it doesn’t give you the skills you need to help a real business.?

At the same time the technology sector is growing by 50% every year.? Startups are in desperate need of a different kind of finance support, and the traditional accounting sector can’t give it to them.?

At Quantico our strategy is to bridge that gap - giving accountants access to fulfilling careers in startups, and giving startups the support they need to thrive.? To do that we have to give people coming from a practice background the skills to run a startup finance function. Fast.

Our business model also means that most of our team work in four, five or six startups every week. In those conditions it’s no surprise that they learn and progress incredibly quickly!

The mistake

We’ve invested hundreds of hours thinking on our skills ladder and our coaching systems at Quantico (and in fact we’ve made them all publicly available in our team handbook here) so we were relatively confident in those.? Plus, like every other company in the industry, we were conducting appraisals once a year. So what was the problem?

It turns out that doing appraisals once a year simply doesn’t cut it.

Our team is learning and developing so quickly that annual appraisals can’t keep up.? If a team member narrowly missed out on promotion in one appraisal they knew that they’d have to wait an entire year to get another chance. In the environment of rapid growth that we’d created it simply wasn’t fair to make someone wait that long.?

Quite rightly they were feeling frustrated and looking elsewhere to get the progression they deserved.?

And it wasn’t hard for them to do - with our step learning curve, and intensive training, they are extremely valuable candidates - not least to the startups we partner with.

Generally, we love it when one of our team wants to go and work for one of our partners full time. But we really want it to be when it’s the right move for them, not accelerated due to problems in Quantico.?

A quick fix

The first thing we tried was a quick and easy fix: an extra ‘exceptional’ review that allowed us to promote the really standout people mid way through the year.?

Unfortunately, like many quick fixes, this caused more problems than it solved. It wasn’t clear whether it was a full review or not.? It created a situation where a couple of people got promoted but the majority hadn’t even been assessed. This caused confusion, resentment and frustration.?

It was clear that a plaster wasn’t going to cover the cracks, we needed a radical solution.??

Planning the solution

First we took the time to put down what we wanted to achieve. We decided that our new appraisal system had to:

1. Recognise the rapid pace of progression in our business model
2. As far as possible, ease the burden of getting it 100% right every single time - mistakes are inevitable when you’re building something new
3. Be as smooth to run, ideally using the time our team have set aside for L&D every Wednesday morning

yet another serious debate

Discovering the answer

We knew annual appraisals were too slow and we couldn't continue with them. We discussed monthly appraisals but this felt like it would be too disruptive.

So we went with quarterly.?

Why? It would give the team much more regular reviews, whilst allowing them time to take onboard feedback and improve between cycles.

Next, how would we conduct these quarterly appraisals from an operational perspective??

Previously, we conducted reviews manually using Coda. This made sense when we were small, but at the stage we’re at now, we knew we had to get more sophisticated. After a lengthy review process, we chose Leapsome. It has some great features to make the employee evaluation process smooth, but crucially, it is also straightforward to customise.

Finally, would our appraisals be top-down, or would we incorporate team feedback??

Personally, I can’t stand those systems where the senior people in the company shut themselves away in a darkened room and decide who’s getting promoted and who isn’t, while you never know what they discuss or why.?

We wanted to design a system that would be fair, transparent and promote a culture of giving and receiving feedback.

We therefore opted for a review process where everyone gets feedback from everyone they work with (both more senior and more junior). A 360 feedback process.

Crucially, we decided against assessing based on feedback from our partners. In a partner-facing role this was a bold decision! But we wanted to ensure that our team was assessed consistently and weren't incentivised to make partners happy at all costs.

Measuring the success

So how did it go?

As with any system, we quickly found that there were winners and losers. Some people received incredible feedback from their peers, and were delighted to be promoted up one, two or even three levels. But, on the other hand, others would find out that they hadn’t progressed as quickly as they had hoped - and they were not happy.?

our team strengths according to their self assessments

There were a few things we learnt very quickly:

1. 360 feedback didn’t give everyone enough data points, for example some people only worked with one or two colleagues across all their jobs
2. Some people were simply more generous or critical than others (one person gave all of their superiors maximum marks across the board!)
3. There were a couple of personality clashes where two very competent individuals simply didn’t work well together

To deal with these factors we set up a moderation committee to make sure everyone got a fair hearing. Leapsome was also really useful in allowing us to assess not only the average score received by each team member, but also identify trends in how generously they assessed everyone else.?

What went well

So far, we think this change has been an exceptional success, which we recommend to anyone with a similar problem.

1. The feedback is more transparent, everyone sees the full feedback they received and there are no decisions made behind closed doors
2. It’s much smoother. With its regular reminders and easy interface Leapsome makes the process a lot easier to manage than our old DIY system?
3. It’s more regular.? The process showed us how many unexpected factors crop up in any appraisal and how quickly performance changes. Repeating it every three months is essential to capture that

One of the core principles of FinOps is ‘always be iterating’. We didn’t get everything right the first time, but we will keep iterating until we do - and we’ll keep you updated as we carry on our mission to build fulfilment at work and make accounting meaningful again.

Join the team

Could you help us invent a better future for the finance sector? Come and join us! We're always looking for great people.

Take a look at our open roles here.

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ps - this blog was originally posted on www.quanticofinancial.com