Hello, Builders! Ever wondered how tech companies promote people and come up with compensation increases? The process starts from Calibration Cycles, which are performed by the management chain of a company, at some frequency throughout the year (normally twice a year, or once per year). Understanding calibrations is a really important tool for the career growth of any software engineer. This is not only because it provides great guidance on how to grow technically and interpersonally, but also because it can affect compensation growth. Back when I first started my career, I didn’t entirely understand how it worked and that definitely bit me, so the hope in writing this post is that I can help you to avoid the mistakes I made 😃! Without further ado, let’s get into it!
Performance Axes
Before discussing the calibration process, we have to first discuss Performance Axes. Performance axes are kind of what they sound like: ways of dissecting performance, admittedly an amorphous term, into more discrete characteristics (axes) that all employees of a certain ladder must have. A ladder is a type of role (such as Engineering, Product Management, Engineering Management, Sales, etc.). Ladders are defined because engineers, for example, cannot necessarily be compared to sales employees. The responsibilities of those two types of employees are different, so we need to have ladders to “compare like for like”.
Axes between ladders are normally different as mentioned above, but they are normally just more fine-tuned distillations of company values, targeted to a particular ladder. Within a ladder, we also have multiple levels defined, so that we get a matrix structure of Axes on the left and levels on the top. Each cell in the matrix (level, axis) describes expected behavior for that axis for an employee of that level. Don’t worry, I’m gonna make this a lot clearer with a specific example.
Let’s say we are defining an Engineering ladder for ICs (Individual Contributors, as opposed to Engineering Managers, or EMs). We could have axes for Ownership, Execution, and Leadership (most companies will have more than this example set of axes, but let’s start with these for now as a toybox example). And let’s say we have levels 3-6 (Why do many engineer levels start at L3? I don’t know, but at some point that convention was established, so I will follow in that tradition 🤣). Now, in Substack as of the time of this writing (May 2023), I can’t insert tables, so I’m gonna split the levels into separate sections of bulleted lists. Our ladder may look like this:
L3:
Ownership: Engineers are responsible for individual tasks.
Execution: Engineers are capable of executing on multiple tasks, with supervision from senior engineering, but can track progress, surface issues, merge code to master, and ship to prod.
Leadership: N/A
L4:
Ownership: Engineers are responsible for individual features and are capable of discretizing those features into individual coding tasks.
Execution: Engineers are capable of executing on multiple tasks, near independently with minimal if any supervision.
Leadership: Engineers elevate learnings to docs and provide onboarding support to new grads.
L5:
Ownership: Engineers are responsible for entire projects.
Execution: Engineers are capable of executing on multiple ambiguous projects, with scope beyond 2 quarters. Cross-org communication and collaboration is a must in order to land such projects.
Leadership: Engineers serve as role models and Subject Matter Experts (SMEs) within their teams and work with their managers to support the growth, interpersonal and technical, of junior engineers.
L6:
Ownership: Engineers are responsible for company-level programs, comprising multiple projects or products each.
Execution: Engineers iteratively advance company-level objectives, with scope beyond 1 year. Cross-company, and maybe even inter-company, collaboration would be involved.
Leadership: Engineers are thought leaders and operate in tandem with Directors+ in order to advance engineering excellence across their orgs.
This is a bit of a simplistic example, but notice how each of the levels in this Engineering ladder have the same axes, but they have growing depth in those axes as we increase level. Within each level though, the axes define expected behaviors which we can use to evaluate the performance of all employees, within the ladder, at that level. This characteristic of axes is the basis of how calibrations are done. We’ll go onto that in the next section.
The Calibration Process
Toward the end of a performance cycle (normally at half-year increments, or once annually), every employee has to complete a performance review. That performance review includes a self-review/self-assessment and maybe some peer reviews, especially in cases where the employee wants to go up for promotion. The employee’s self-review will focus on the demonstration of the requisite behaviors for each axis over the performance cycle. That review and the peer reviews will be submitted to the manager of that employee (sometimes referred to as “report”, since that employee “reports” to the manager).
Then managers will attend meetings with other managers, where they discuss how each of their respective reports performed against the ladder’s axes. How well each report performed against the axes determines his/her rating for that performance cycle. The possible set of ratings varies between companies. At the simplest, it’s 3 ratings:
Didn’t Meet Expectations
Met Expectations
Exceeded Expectations
Many tech companies have 5 ratings though. The ratings directly correspond with salary increase coefficients. For example, in the above rating system, “Met Expectations” could be a 5% salary increase and “Exceeded Expectations” could be a 10% salary increase. In companies with annual bonuses, the rating also determines a coefficient for the bonus.
Now why do the managers even have to meet and discuss amongst themselves what their respective reports’ performances were? Don’t we already have axes that define expected behaviors and therefore we know? Yes, but the axes’ descriptions at each level could be vague, and there’s the rub. Managers need to “calibrate” their expectations for a given level with other managers who have reports in that same ladder and level. Calibrating expectations essentially means “interpreting the cell in the ladder matrix and coming up with specifics”. This is why this process is referred to as “Calibration”. Makes sense, huh 😃.
A note on calibration meetings: These are normally a time of great anxiety, for both ICs and for EMs. ICs obviously want the highest rating possible and EMs want to support them in that goal. However, the comparison process can be stressful and in some companies, calibration meeting rooms sometimes have their windows and doors covered so that employees can’t look inside.
After calibration meetings, each manager will have a rating for his/her reports and will include that rating in their manager review back to the report. There is then a series of 1:1 that the managers have to schedule with their reports. In those meetings, they will share their manager review with a report, what the rating was, and how that affects compensation for the next performance cycle.
“But wait? Do I have no control over the results of calibration?”
- Any IC
Good question. I will discuss that next.
Preparing for Calibration
Over the course of a performance cycle, you likely had goals you wanted to achieve. Those goals you would have discussed with your manager, and the two of you would’ve worked together to make sure that the goals support your growth and can demonstrate proficiency in the ladder axes for your level. Goal-setting is absolutely more of an art, not a science, but any ambiguity can be worked through with constant communication between you and your manager. The more you help your manager to know how you’re doing and what awesome achievements you’ve made in the performance cycle, the more your manager can help you during calibrations.
NOTE: There can absolutely still be surprises post-calibration, either positive or negative, even with constant communication between yourself and your manager during the performance cycle. Calibration committees are organic discussions. Your manager will try to present you in the best way possible, but every other manager also has the same goal.
There is a fair degree of trust that needs to be maintained between a manager and his/her report(s). Always assume best intents with your manager and make sure to keep communication lines open.
There is a lot more nuance, and definitely many variations on the calibration processes for different levels in a ladder within any company, and even between companies who are calibrating for the same ladder and level. But I hope this post helped to demystify the calibration process for you!
If you have any questions or requests for more topics to discuss, please do drop me a comment!