Evaluating by “Impact,” AI inside’s New Evaluation System
What comes to mind when you hear the term “evaluation system”? Generally, it refers to the method of determining the employee performance within the company, and during that time of year, it is common to hear employees asking each whether they have achieved their targets or not.
In October 2021, we started a new evaluation system at AI inside. Rather than a system that determines employees’ general goal setting, we have upgraded it to a framework that enacts our objective of contributing to our mission for a richer future society by delivering AI to people and things across the world.
In this article, we interviewed our HR manager about the background and ideas for changing our evaluation system.
This is his 13th year working in the field of HR after he made a career change from sales in job advertisements. Joined AI inside in December 2020, after he was drawn to the company’s effort to achieve the vision for the future by designing the market itself. He currently leads projects related to the HR system as the Vice President of the People Relations Unit.
The evaluation system stifled the ingenuity of employees
— What triggered the revamping of the evaluation system?
The old system evaluated results based on individual objectives and key results (OKR), attitude, and behavior. However, since starting this operation, our employee numbers have increased alongside the growth of the company. In addition to this, the organizational structure has changed, and with remote work becoming the norm because of the pandemic, our working environment has changed significantly.
However, two issues arose because of these changes. First, individual OKRs became simply a method to manage the goals for the sake of the assessment. Second, it is difficult to monitor remote work behavior with an assessment that presupposes that work will occur in an office environment where employees physically interact every day. The first issue was particularly problematic for us.
— What kind of effect was made because of the individual OKRs becoming simply a method?
The employees did not feel a connection between the company’s objectives and their OKRs. It was difficult to discern how their efforts were linked to project strategies, and how they pertained to the company’s objective and vision. Sometimes we heard their concerns directly.
When the connection between a company and an individual deteriorates, it becomes difficult for them to be motivated in their job. Employees are unlikely to take initiative or be creative if the work objective is unclear.
There are often significant changes within our company, and it is common for project scopes to change largely in a short period of time. Thus, the objectives that individuals set at the start of a project occasionally change, making them feel like the objectives they had initially set were pointless after they ended up working on completely new targets. In addition, because employee treatment is based on the level of achievement regarding the objectives set, they set individual OKRs that are relatively achievable.
Although we are a company that creates value that was initially nonexistent in the world, we realized that our evaluation system was stifling the sense of ownership and entrepreneurship of our employees. So, we decided to redesign our evaluation system, opting to sever the tie between individual OKRs and evaluation.
Updating to an evaluation system centered on “impact”
— What method did you employ to deliberate on the new evaluation system?
First, we conducted multiple one-on-ones with employees and summed up the issues that were occurring in-house to design a concept that would become the basic policy of our staff and organization. We articulated our employees’ work perspectives, roles, and goal management, and we defined our aims.
Then, while reviewing our current processes and tools to determine the limitations of our current system, we designed a new evaluation system and enacted it in October 2021.
— Could you tell us the key points of the new evaluation system?
First, we discontinued the system of setting goals for our evaluation. This does not mean having no goals, but rather that we focus on evaluating the essential value that each person creates rather than just setting achievable goals for the sake of evaluation.
Furthermore, assuming that we could use our objective as our basis of evaluation, our system will develop into one that evaluates the amount of impact created through ingenuity, challenges, and teamwork.
The structure we have to realize this is “Unit OKR evaluation” and “impact evaluation.”
— What are the aims of each evaluation?
First, regarding unit OKR evaluation, which fosters a mindset that produces greater results as a team, we stopped creating OKRs on an individual basis and created them for units (our company’s name for teams) for assessment based on difficulty and achievement.
As a platformer, we created significant value by forming and expanding an ecosystem. This is the same for operations within our company. We started evaluating the contributions of individuals working as a team toward achieving significant results.
Next, impact evaluation is a comprehensive evaluation of results from actions and the influence of those actions. However, creating impact is challenging. To tackle difficult problems with ingenuity, proactively opening up new possibilities and involving the people around you to create significant changes is necessary. We want to keep this series of processes in mind and make them a habit. We want this to become AI inside’s culture.
— Were there any other major changes in the evaluation process?
We switched from an evaluation method for achieving objectives on a 1–5 scale, to a process of writing personal reports of one’s results. Then, the supervisors or team members provide 360-degree feedback on their initiatives and contributions.
Although it is clearer and easier to understand if the evaluation is based on numbers, accountability is required to be a person that creates value for the world. Being a professional means receiving an equal value to the value contributed to a company. Due to this, we have high expectations of our employees. However, if they are not held accountable, innovative and creative work will be impossible. Of course, this cannot change overnight, but we have launched this new program to nurture this culture in the company.
Work as a group with a purpose, rather than being driven by objectives
— How has your experience been with the new system?
We have only recently begun so we are in the first phase of getting our employees to understand the new system. We trust that bigger changes within the company are imminent, but what is important is that we clearly showed our employees what our priorities are. Specifically, these assessment points are ingenuity, challenges, and collaboration, which are part of our impact assessment. We could convey that we are not only emphasizing the value of what was created but also the actions that led to the creation.
— Tell us your thoughts on the new system.
To achieve our vision and objective, the impact we can create will largely hinge on people’s capacities and their behavior toward work. So, by abandoning the previous practice of setting objectives for the sake of assessment and encouraging individuals to take initiative toward larger goals, each person can continue to spark new value as a professional. We trust that by reconsidering the meaning of work and having more people demonstrate leadership, we can enrich and brighten our future society.
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