Wednesday, November 15, 2006

Focalization #1

I'm going to post a couple of entries about the annual review process at Intel, known to employees as "focal" or R&R, which is an acronym for Ranking and Rating. My goal is to explain how focal works, what problems I have with it, and to give some tips to employees to better deal with the process. Some of this material is going to be obvious, some of it may not. I've been on both sides of the focal equation for several years (as an employee and a manager).

For any non-Intel readers, focal consists of collecting information on each employee from several sources, going through an evaluation process where they are ranked and rated based on their performance, determining compensation, and then giving feedback and results to the employee. A manager collects information from the employee themselves, from peers or stakeholders the employee recommends (and possibly some they don't recommend). They then complete an short written assessment of the employee using that information and their own observations. A manager theoretically has a fairly well rounded view of an employees accomplishments, strengths, and improvement areas from several sources. People are grouped by job function and/or manager into "Rank Groups", and the managers representing the people in a group sit down in a room and go through the written evaluations. Basically, you end up ranking people from the top to bottom (largest to smallest contribution). Being at the top is always good, but being at the bottom is not necessarily bad. For example, if you are junior relative to the others in the rank group, you would expect to fall toward the bottom.

Employee compensation is largely determined based on how well employees performed relative to their peers in similar roles and at similar pay grades. So if people in similar jobs at similar pay grades ranked higher than you did, there would be questions about why you feel below your peers. Similarly, if you were ranked above your peers, you would appear to be doing a better job. At a high level, I think this is a good process that generally does a fair job of evaluating performance. But in practice, there are several pitfalls, and it tends to encourage and reward some bad behavior on the part of managers. I don't know of anyone who likes it.

Your performance is determined based on how you stacked up relative to the other people in your rank group, not by an arbitrary measure. There are some obvious implications to this: if you work with a bunch of overachieving geniuses who live to work, you're going to have a harder time competing than if you work with a people not as highly skilled as you, or who don't work as hard.

Intel pushes the idea of target distributions for rank groups. In general the top 10% of the rank group is considered to be doing better than everyone else, and the bottom 10% is considered to be doing worse. It's a little more complicated than this, and the percentages may be different, but the idea is that a distribution needs to be hit. It's considered a target by HR, and very few people at Intel will tell you that it's a hard target.

I've worked in about 5 different groups at Intel, and had a dozen managers. All but two of them have insisted on hitting our distribution targets in focal. In practice, these distributions are almost always hard targets that need to be hit. Finding high performers is easy - the highest ranked people at a given pay grade are usually your top performers. You start handing out higher ratings to them until you meet your quota. Then you start looking for poor performers. Sometimes you have an obvious candidate or two. But with smaller rank groups in particular, you may not see anyone who deserves a bad performance message.

Because each rank group rolls up organizationally, each org manager will look across rank groups for an average. But if they aren't hitting their numbers, managers are going to be asked to find more poor performers.

This explanation turned out to be longer than I expected. What you need to understand about focal is that just doing a good job may not be enough to get a good review. If you're doing a good job, and everyone you work with is a doing a great job, you'll be at the bottom of the pack. My next entry will cover some ways to help manage this and how to prepare for the process.


Engineer in the Field said...

I have somewhat conflicting views on our focal process. At one side, I think it is great because in principle it will reward the best employees and let the underachievers know what is thought of them, as well as giving them the change to improve.

On the other hand, we all know focal is not as fair as it should be. Focal is politics. Also, focal depends on your manager's ability to convince a panel that you're better than someone else. I am an engineer in the field and I am always told to include how many units were sold indirectly due to me. It's a difficult thing to measure and obviously my numbers are much, much lower than someone from a sales team. The fact that someone will compare my "sales" numbers with someone who actually sells units is preposterous, but it happens.

Intel IT Guy said...

I agree with you. Overall the process seems to be a good one. The problem is that you get some managers in the room who want their people to win more than they want a fair result for everyone. I'll give some examples in my next post.

Anonymous said...

I haven't been in the focal process for the past couple years, but was in it as a direct manager for about 7 yrs beforehand.

Agree w/what is being said, and I think as Intel has gotten bigger and more political, so has the focal process. Unfortunately, some managers look as focal to enhance their political "CYA network" by showing preference to some of their own people. In other words, they give their favorites a free pass and hold others to a more scrutinous standard. Hopefully, there are enough managers to push these types to justify their argument so that it is a somewhat "fair process".

Until a couple of years ago, the focal discussion involved many managers in your peer group ... I think it made it more "fair and balanced". Now, I am told it is up to your manager alone to rank/rate you and cross-manager discussions are very minimal (only occur for those who are being pushed for promotion). I think this takes away from focal by removing the "democratic process" of cross manager discussions and makes it way too dependent on your own manager's opinion of you. This further serves to make the Intel environment more political, IMO.

As an aside, I do remember one year when we had our division manager was running it and he wouldn't let us leave until we gave someone a "Slower Than". No one in our group really felt anyone deserved it, so we went round and round until after 8pm, and out of exasperation we picked someone whom we still felt it was undeserved. Most of us left with a sick feeling in our stomach. So there is a % quota that has to be made of IR's and "slowers".

Former Process Engineer said...

As a former (voluntarily former) Intel employee, I have a very skeptical attitude towards Intel's focal process. Its a process that in spirit should be fair and promote meritocracy, but in practice, it doesn't work that way. Its much to much a function of the people doing the evaluation.

I worked at Intel for 11 years ('95 to the fall '06), and I have been evaluated unfairly multiple times just because I was put in a rank group that had no choice but to treat my contributions as worth less than others in the rank group. I saw this as the person being evaluated and when I was in the room doing the evaluations of other people.

If the people doing the evaluation do not have a full comprehension of the work that everyone does in the room, its highly likely that the focal process will turn into a political game where only the favorite employees will get put into the higher rank groups.

In 11 years at Intel, I've had probably 20 to 30 different managers in my direct management chain. Little of this large number has to do with job changes internally by myself, it usually was managers being moved around for reasons not understood by myself.

Its very sad. Intel when I joined was a great company. It was a place that had an electricity about it. You couldn't have paid me more money to leave Intel at that time. Intel when I left was a company with top down management where employees were basically discouraged to think outside of the box. As much as the SET people want to try to changes things, I see little opportunity to do this just due to the silly fiefdoms that have evolved over the past 10 years, which are next to impossible to change now.

Anonymous said...

I was in Intel India barely a year. The focal process was something like an entrace examination...probably an examination to exit! There was on one hand a relative grading system where someone "exceeded expectation" while others were "below expections" - at the same time when hiring kept happening within the same group. In short the focal process resulted in a revolving door where the policy never meant to retain an employee. If an employee "met expectations" he would sometime be "below expectation" when at the same time there would be another new employee.

Politics was definitely part of the "fair system". Project engineers/managers kept conducting "oral examinations" to the were individual engineers below and "collect data" while their mistakes would be never be accounted for.

There is no question that Intel happens to have highest attrition rates in India, where recruiters amoung others fetch their largest pool of fish.