The performance management (PM) of employees is essential for companies to be successful in the long term. Performance assessments are in the interest of employers and ensure the fair treatment of employees. Through structured 360° feedback, promotions and development opportunities are not dependent on the favor of individual managers, but are dealt with in a polyphonic, fair and transparent manner.
Zalando’s employees are younger on average, highly self-motivated and possess a keen desire for continuous development. They want to know what is expected of them in their role, to be able to assess their own performance and to identify their development potential. Performance Culture is not a means of exerting pressure, but rather a commitment to a mutual promise. We invest heavily in the further development of our employees and promote talent mobility. This means that we offer various career and development opportunities within a given department, as well as the opportunity for an employee to realign themselves within the company based on their interests. The main goal of our PM is to give all employees a role in which they can be successful and develop further.
How 360° Feedback Works
Twice a year, we hold structured feedback rounds with the help of our Zonar software. About 5,000 of our 14,000 employees take part in this PM. Zonar itself only serves as a tool: the heart of our feedback culture is personal discussions, both between employees and their managers, and between the employees themselves.
Before each feedback round, employees nominate up to eight feedback providers. Their managers help them to make a selection that covers as many of their work areas and projects as possible. Feedback is entered anonymously into the Zonar tool.
Fostering the Best Possible Growth of All Employees
In order to ensure the greatest level of impartiality and narrow the scope for interpretation, the individual feedback is first evaluated by special committees. Here, no rankings, scores, algorithms or other quantitative classifications are used; only human judgement. For example, the balance of the feedback received and special circumstances are taken into account.
The committees, which consist of representatives from various departments across the company, forward the reviewed feedback to the appropriate manager, who then uses it as a basis for in-depth discussions with their employee. Together, they look back on the last six months and identify strengths and opportunities for further development and training. Part of the interview is also a self-assessment of the employees. They then consider together what a suitable project or further training could be in order to develop and promote the employee’s individual skills.
Transparency Concerning Salary Increases
Salaries at Zalando are determined on the basis of salary bands. For each job family, i.e. similar jobs with the same level of seniority, there is a company-wide framework on which the salary range is based. In feedback interviews, employees find out where they are on their respective band. Our average, company-wide salaries increased in 2018 and 2019 were well above the German average of 3.1 percent.
Team Support Instead of Top-Down Feedback
Zalando has grown rapidly and our performance management has evolved over the years. In 2016, we introduced a first version of Zonar, a major breakthrough in 360-degree logic. Previously, for example, decision-making processes concerning promotions were not standardized and were essentially reserved for executives. This top-down approach, which had few qualitatively-comparable benchmarks, gave many employees the feeling that they were subject to their managers' interpretation of their performance and, that is to say their subjective feelings. Our goal with Zonar was and is to create transparency and fairness.
An Open Feedback Culture At Work, Every Day
An open feedback culture is a constant in our work, which also takes the form of company-wide feedback rounds. We encourage our employees to exchange constructive feedback in personal discussions as often as possible. After each project, recap sessions are held throughout the project team to learn from mistakes.
In addition to fostering feedback among our employees, we collect feedback about Zalando as an employer in anonymous employee surveys four times a year. As a company, we use these assessments to continuously improve our PM for everyone. In the most recent survey of September 2019, only 13 percent of the employees surveyed stated that they would like to work outside Zalando within the next one to two years. 67 percent say they would recommend Zalando as a good employer. In the rankings of the most popular employers in Germany, Zalando annually ranks among the top five employers (LinkedIn, Glassdoor).