No More Scores!
"We don’t manage talent. We develop it.”
– Spotify, The Band Manifesto
Performance management has long been a complicated issue for organizations. Few dispute the need for evaluation, but questions persist: What’s the right way to measure performance? How do we increase engagement and employee buy-in? For fast-growing or global-facing companies, the traditional once-a-year review model often fails to support both individual growth and company goals.
Spotify took a completely different approach. No performance ratings. Employee-led conversations. A system not for judging talent, but for helping it thrive. At its core, Spotify’s model is designed to drive both high performance and high engagement.
This article breaks down Spotify’s performance management structure, showing how the company elevates engagement while cultivating growth.
Performance Starts with Development, Not Control
Spotify’s organizational structure is built on autonomy and accountability—not rigid hierarchy. Employees work in small, agile teams called “Squads.” These Squads are grouped into Tribes and Chapters. Managers at Spotify don’t act as supervisors—they serve as player-coaches who support, align, and coach their team members.
In this system, performance management doesn’t revolve around manager mandates. It begins with employee-led dialogue. Spotify encourages regular, flexible 1:1 meetings where managers and employees discuss challenges, check progress, and shape future goals together.
The emphasis is on development and direction—not control.
As Spotify puts it, “Great conversations are at the heart of great performance development.”
“The most essential pillar of our performance development is quality conversation.”
— Johanna Bolin Tingvall, Global Head of GreenHouse, Spotify
Replacing Annual Reviews with Growth-Oriented Snapshots
Spotify recommends each employee engage in two Development Talks per year.
These conversations aren’t backward-looking. Instead, they focus on one key question: “Where do I grow next?”
•
Employees initiate the conversation themselves
•
Peer feedback is collected voluntarily
•
The focus is on direction over past outcomes
In place of numeric ratings, Spotify introduced the Talent Snapshot, a qualitative, narrative-driven tool that assesses performance based on real context.
The Talent Snapshot evaluates individuals across three dimensions:
•
Mastery: Level of expertise in specific domains
•
Achievement: Progress toward objectives
•
Behavior: Alignment with company culture and values
This information helps managers visualize team strengths and potential, guiding decisions about development and resourcing.
Decoupling Performance from Compensation
Spotify recognized a major flaw in traditional models:
“Employees focused more on collecting positive feedback than receiving constructive input. Growth opportunities were missed.”
– Cited by Harvard Business Review
To address this, Spotify separated performance development from compensation reviews. In earlier versions, peer feedback influenced pay decisions. This incentivized praise over honest evaluation.
Now, compensation discussions follow a distinct process. This creates psychological safety, encouraging more candid, growth-focused feedback.
What About Measurable Metrics?
Despite eliminating numeric scores, Spotify still monitors engagement and development through quantifiable metrics. These indicators provide insight into employee well-being, motivation, and alignment.
Here are 10 core metrics that any company can adopt.
1. Employee Satisfaction (eNPS: employee Net Promoter Score)
Definition
Measures how likely employees are to recommend your company as a place to work. It reflects how well the employee experience matches expectations in areas like compensation, leadership, and growth opportunities.
How to Measure
Ask: “How likely are you to recommend working here to a friend or colleague?”
Responses:
•
9–10: Promoters
•
0–6: Detractors
eNPS = % of Promoters – % of Detractors
Practical Tips
•
Add open-ended questions to gather context.
•
Track changes over time to identify trends and reactions to policy changes.
Example
If 60% are promoters and 10% are detractors, your eNPS is 50—a strong result.
2. Overall Turnover Rate
Definition
The percentage of employees who leave the company over a specific time period, whether voluntarily or involuntarily.
How to Measure
(Total number of departures / Average number of employees during the period) × 100
Practical Tips
•
Compare with industry benchmarks.
•
Analyze by tenure, department, or region to find root causes.
Example
If 15 employees leave out of an average 100 during the year, the turnover rate is 15%.
3. Turnover Rate per Manager
Definition
Measures the turnover rate within a specific manager’s team to help identify potential leadership or culture issues.
How to Measure
(Total number of departures within the team / Average team headcount) × 100
Practical Tips
•
Compare across teams with similar functions.
•
If one manager’s turnover is unusually high, investigate deeper with exit feedback or employee surveys.
Example
A team of five loses two employees: (2/5) × 100 = 40% turnover under that manager.
4. Talent Turnover Rate
Definition
Tracks how often top-performing or high-potential employees leave the organization. Losing top talent is more costly and damaging than average turnover.
How to Measure
(Number of top performer departures / Average number of top performers) × 100
Practical Tips
•
Use performance reviews or ratings to define “top talent.”
•
Compare to overall turnover to assess risk.
Example
If 5 high performers leave out of an average of 50, the talent turnover rate is 10%.
5. Voluntary Turnover Rate
Definition
The percentage of employees who choose to leave the organization (as opposed to being laid off or terminated).
How to Measure
(Number of voluntary resignations / Average headcount) × 100
Practical Tips
•
Conduct exit interviews to gather reasons for resignations.
•
Compare this with talent turnover to see if you're losing the wrong people.
Example
8 voluntary resignations out of 95 average employees = 8.4% voluntary turnover.
6. Absenteeism Rate
Definition
Measures the average number of unplanned absences (excluding approved PTO), which may signal disengagement or wellness issues.
How to Measure
(Average number of unexcused absences per employee / Total workdays) × 100
Practical Tips
•
Monitor for patterns (e.g., Fridays or quarter-ends).
•
High absenteeism can suggest burnout or morale issues.
Example
2.5 days missed on average over 90 working days = 2.8% absenteeism rate.
7. Absenteeism per Manager
Definition
Measures absenteeism by team or manager to identify localized problems such as toxic culture or overwork.
How to Measure
(Sum of team member unexcused absences / Team size × Workdays) × 100
Practical Tips
•
Combine with retention and satisfaction data to detect team-specific issues.
•
Look for deviations from department or company averages.
Example
A team has an average of 1.2 days absent per member over 90 days → 1.3% absence rate.
8. Individual Performance Metrics
Definition
Includes both quantitative (output, goal achievement, error rates) and qualitative (peer feedback, collaboration) performance indicators.
How to Measure
Custom performance review frameworks can include self-assessments, peer evaluations, and manager reviews.
Practical Tips
•
Use both numeric scales and open-ended feedback.
•
Align metrics to company values and business outcomes.
Example
An employee exceeds sales goals but receives low peer collaboration scores—indicating need for coaching, not dismissal.
9. Goal Achievement Rate
Definition
The percentage of personal or team goals successfully achieved within a period.
How to Measure
(Number of goals completed / Number of goals set) × 100
Practical Tips
•
Check for consistently low or overly high completion rates—both can be red flags.
•
Combine with performance conversations to explore context.
Example
6 of 8 goals completed = 75% achievement rate.
10. Goal–Organization Alignment
Definition
Measures how well individual or team goals align with organizational priorities and KPIs.
How to Measure
Review goals across departments and analyze how they cascade from company objectives.
Practical Tips
•
Use OKRs or cascading goals framework.
•
Misalignment suggests a need for better goal-setting processes or communication.
Example
If 70% of individual goals don’t support team or company OKRs, leadership recalibration is needed.
Why Spotify’s System Works
Spotify’s system isn’t just novel—it’s structurally sound. Its strength lies in how deeply performance and culture are integrated.
1. Connecting Growth to Impact
At Spotify, performance is a byproduct of personal growth—and vice versa. Development is aligned with business outcomes.
2. People-First Philosophy
The focus isn’t just on metrics. Real human potential, motivation, and learning are prioritized.
3. Continuous Dialogue
Frequent, informal conversations replace one-size-fits-all reviews. Employees gather feedback proactively.
4. Personalized Growth Paths
Employees are empowered to own their development. Managers guide—not dictate—the journey.
5. Independent Rewards
Compensation is handled separately from performance discussions, ensuring safer, more authentic feedback.
What Can We Learn?
While not every organization can operate like Spotify, several universal principles apply:
1.
Separate compensation from development.
True growth discussions can only happen in psychologically safe spaces.
2.
Let employees lead their development.
From feedback collection to goal-setting, empowerment breeds engagement.
3.
Focus on conversations, not just scores.
The context behind the performance often matters more than a number.
Designing a High-Performance Culture
Spotify shows us that performance management isn’t a standalone process. It’s part of a broader cultural design.
•
Separate rewards from reviews
•
Empower employee-led development
•
Prioritize behaviors over scores
•
Track engagement with meaningful metrics
This holistic approach creates a cycle where people grow—and organizations thrive.
How TalentSeeker Helps You Build the Same Foundation
Spotify’s model isn’t just for Spotify. The underlying principle—strategic alignment between performance, engagement, and growth—is universal.
TalentSeeker enables you to build a similar system from the ground up:
•
Evaluate candidates based on real-world experience, not resumes
•
Use AI-powered matching to assess job–talent fit across roles and projects
•
Generate Talent Snapshots to understand capabilities and growth potential
•
Identify soft skill signals like collaboration and initiative
Finding this kind of talent is difficult—especially when the best candidates aren’t actively job-hunting.
TalentSeeker gives you access to a global talent pool of over 300 million profiles, helping you find and engage high-potential individuals faster and more accurately.
If you're looking to build a culture that links growth with performance, TalentSeeker is the right place to start.
