---
title: "Hacking the Performance Evaluation"
description: "Learn how top startups like Google optimize performance reviews by separating growth feedback from compensation discussions - proven tactics for better outcomes."
categories: ["management"]
keywords: ["performance evaluation","Google performance reviews","split review process","employee feedback","compensation discussions","personal development","management strategies","workplace motivation"]
ai_summary: "Explore how Google optimizes performance reviews by separating feedback from compensation to enhance employee development."
date: 2015-04-13
lastmod: 2026-07-21
canonical_url: https://www.tomtunguz.com/hacking-performance-reviews/
author: "Tomasz Tunguz"
---

Performance reviews tax organizations, managers and employees to such an extent that [some companies have abolished them outright](http://www.businessinsider.com/adobe-abolished-annual-performance-review-2014-4). Reviews are emotionally complex conversations. Positive and negative feedback are intertwined with conversations about career progression, raises and equity grants. These meetings are emotional powder kegs; and it's no wonder they stress us.

In [Work Rules](http://www.amazon.com/Work-Rules-Insights-Inside-Transform/dp/1455554790), Google's Chief People Officer Laszlo Bock, argues for a different type of performance review: a split review. At Google, "annual reviews happen in November, and pay discussions happen a month later."

There's a theory underpinning this decision. We motivate ourselves by internal and external factors. The satisfaction of improving a skill is internal. A cash bonus is external. Self-improvement elicits better performance than compensation, but both motivators work. The problem, though, is when they are conflated. 

Research shows that external motivators can easily trump internal ones. In a review, it's easy to focus on the compensation elements to the detriment of the personal growth feedback. So, most reviews end up being about compensation, rather than self-development.

To quote Pasad Setty, another Googler in the People Ops team:   

> "Traditional performance management systems make a big mistake. They combine two things that should be completely separate: performance evaluation and people development. Evaluation is necessary to distribute finite resources, like salary increases or bonus dollars. Development is just as necessary so people grow and improve."

I haven't experienced a split performance review, but I hope to. The idea makes sense to me, and I suspect that having two conversations, one about internal motivators and one about external motivators, would have helped me focus more on personal development. 

Plus, splitting the conversations into a personal development conversation and a compensation conversation deflates a lot of the emotional tension and stress of the current way most companies do reviews. 

Would you prefer a split review?