Lattice: Performance Management for the People
The covid-19 pandemic has upended the way that people work and how companies manage their employees. A study performed by Slack and released in October gives some basic statistics on what has already changed and what will remain different in the long run. By August 2020, 44% of knowledge workers in the US were working primarily from home, while only 35% were working primarily from a company office. All indications are that such changes will remain for an extended period of time as only 12% of workers desire to return to the office full-time, while 72% hope to have a home / office hybrid work schedule.1
The emotional toll of the pandemic on knowledge workers has also been pronounced, as 53% have indicated that the consequences of the pandemic have negatively affected their mental health. An abundance of studies show that decreased mental health directly links to decreased workplace productivity.2
The above factors have made proper human resource management both more complicated and more important for enterprises of all sizes than ever in recent memory. Sean Silverthorne, a writer for the Harvard Business School publication HBS Working Knowledge, put it this way:
The COVID-19 pandemic upending routines calls for relaunches to help leaders and team members understand how each member has been affected, figure out how to address concerns, and ultimately get everyone back on the same track to achieve team goals.3
Taking the time to properly manage one's workforce has never been more important.
What is Lattice?
Lattice is a cloud-based platform that helps enterprises more effectively manage their most valuable asset: employees. Lattice is attempting to flip the script on traditional people management methodologies by making goal-setting, performance review, and frequent feedback more centered around individual goals, rather than around organizational ones.
Lattice was founded in 2015 by Jack Altman and Eric Koslow. The company has raised a total of $154M in funding across 7 rounds from investors like Tiger Global, Shasta Ventures, Thrive Capital, and Y Combinator. Lattice was in the winter 2016 batch at Y Combinator and has since received follow-on funding from the famous accelerator in multiple investment rounds.
Lattice has won customers like Slack, Cruise, Asana, and Reddit with over 2,500 total organizations paying for the product. Such rapid adoption has propelled the company to a reported $1B valuation in its most recent round, which was just last month March 2021.4
Traditional People Management
Jack Welch was the CEO of General Electric from 1981 to 2001 and is often considered the father of performance management in the business world. Welch utilized the "forced-ranking system" (a creation of the US military during WWII) to separate high performers from middle-tier performers and middle-tier performers from low performers.5
In this system, "A" players were commonly rewarded with sizable bonuses and opportunities for promotion. "B" players were kept around and given periodic but less consequential raises. "C" players would be forced out of the company over time. This tactic created a bell curve of employees like the following:
This system, while it has proven effective for many organizations, treats employees as little more than tools used to carry out a company's mission.
Many studies have shown that these top-down performance management systems weigh on both managers and team members. One estimate shows that 95% of team managers and 90% of HR managers do not believe that their performance management tools create accurate assessments of employees. Most employees are also dissatisfied with the process.6
Laszlo Block is a former consultant and business executive who ran people operations at Google for 10 years. Google (though a favorable employer per the opinion of its employees) is known for a similar bell curve performance management system.
Laszlo recently gave this disappointed review of existing performance management practices:
Performance management as practiced by most organizations has become a rule-based, bureaucratic process, existing as an end itself rather than actually shaping performance. Employees hate it. Managers hate it. Even HR departments hate it.7
A Leg Up With Lattice
Lattice makes performance management more collaborative and places the focus on employees in four main ways:
Employee goal setting
Employer / Manager one-on-one's
Real-time feedback
Periodic performance reviews
First, Lattice's platform allows managers to define team goals and individual goals that contribute to them. Making the setting and attaining of goals top-of-mind helps team members to more directly see how their work contributes to progress of a greater scope, giving them a sense of accomplishment and purpose.
In that same vein, Lattice places emphasis on weekly 1:1 meetings between managers and team members to discuss progress on goals and any other burning questions or complaints the team member may have. In product demos, Lattice makes it clear that these meetings should be used as an employee's time to discuss whatever is on their mind, as opposed to the manager's time to give feedback or criticism.
Another way to keep employees engaged in their work and improve performance is by giving frequent feedback, whether it's praise or constructive criticism. Many organizations have become so accustomed to the predictability of the semi-annual performance review process that employees receive no feedback whatsoever outside of those two times per year.
One mark of an effective manager in the workplace is the level of contact that she has with her team members. A study of over 22,000 managers by leadership research firm Zenger Folkman showed that leaders who ranked in the top 10% of being able to give honest feedback to their employees were on average 3x more engaged (or had 3x more communication and contact) with employees. Lattice treats frequent feedback as a first class citizen of its product and makes it easy for managers to provide it.8
Lattice's product doesn't completely disregard the more comprehensive, periodic performance review. Instead, it gives it a needed facelift and functionality enhancement by providing rich context while performance reviews are being written and read. The product features mentioned above generate a record of an employee's thoughts, performance, and goals.
With Lattice, when managers are writing year-end reviews, instead of beginning from a blank slate, they can view all the goals that the employee has accomplished, one-on-one meetings that have been held, and smalls bits of feedback that have been given in the relevant time period.
Software as a Thought Framework
Using Lattice has been revolutionary for HR departments at many big companies like the ones mentioned earlier (Reddit, Slack, Asana, etc.). One Lattice customer success video shows an interview with an HR manager in the events industry named Nina. Nina gives the following review of her experience integrating Lattice into her team's daily life:
Prior to going with Lattice, we actually were using PDFs and word documents. So, we really needed to find a solution that was going to be more robust, and ultimately as we looked at other software solutions that were out there. We couldn't find one that was as robust as Lattice.
SaaS applications like Lattice more often than not don't implement any revolutionary, new technology, but instead they simply decrease friction for their users, and they sometimes even attempt to frame users' thinking. I think Lattice is a nice example of "software as a thought framework", if you will.
Listening to interviews of the founders of Lattice, it's very clear that in founding the company they were trying to re-imagine how corporate performance reviews work. Lattice as a product is simply the software manifestation of this re-imagining (the thought framework), and I'm excited to see the momentum it continues to carry through these times when work patterns are rapidly adapting to new circumstances.
https://slack.com/blog/collaboration/workplace-transformation-in-the-wake-of-covid-19
https://www.forbes.com/sites/forbesbusinesscouncil/2021/01/25/mental-health-during-the-pandemic-and-its-impact-on-the-workplace/?sh=38bb85d82422
https://hbswk.hbs.edu/item/18-tips-managers-can-use-to-navigate-covid-s-rising-waters
https://hbswk.hbs.edu/item/18-tips-managers-can-use-to-navigate-covid-s-rising-waters
https://en.wikipedia.org/wiki/Jack_Welch
https://www.shrm.org/resourcesandtools/legal-and-compliance/employment-law/pages/more-employers-ditch-performance-appraisals.aspx
https://www.shrm.org/resourcesandtools/legal-and-compliance/employment-law/pages/more-employers-ditch-performance-appraisals.aspx
https://www.linkedin.com/pulse/top-4-reasons-provide-ongoing-performance-feedback-gunjan-bhatia/