Beyond Ratings: Performance Without the Box (Shirvani Mudaly, CPO at Lightspeed, and Kahina Ouerdane, CPO at Workleap)

Shirvani - 00:00
More often than not, most of the effort at the end of the year goes into managers justifying why the employee’s goals moved. The company made a different decision, we did this or that… so it's all just subjective stuff at the end anyway. Goalposts change, and they should change. You should be agile and change your goalposts. If things aren't working at the beginning of the year as a KPI, it's likely they're going to change by the end of the year.

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Kahina - 00:24
Welcome back to Leading Culture: Building the Future of Work. I'm Kahina Ouerdane, Chief People Officer at Workleap. I've always believed in the power of collective intelligence — how people coming together can create something greater than the sum of its parts. And that's exactly what this podcast is about. We're having real conversations about what it takes to lead in today's workplaces.

Today I'm joined by Shirvani Mudaly, Chief People Officer at Lightspeed. With 20+ years of experience across tech, finance, and media, Shirvani has an impressive track record and is known for scaling culture, building high-performing teams, and leading with purpose. Under her leadership, Lightspeed was named one of Montreal's top employers in 2024. Hi, Shirvani.

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Shirvani - 01:06‍

Hello. How are you?

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Kahina - 01:07
I'm good. I'm so happy that you're joining us today. Thank you, thank you for making the time. You and I have had a few conversations in the past year and one of the topics that I think we're both really passionate about — and I really want to take a stab at that right away — is the topic of performance management. I think that there's no HR leader who's indifferent to this topic.

I want to hear your thoughts. On our side, we've tried a lot of things throughout the years. Some have worked, some have not. We have a very ambivalent and complicated relationship with the concept of ratings, and I think that you do too. And I want to hear your thoughts on this: yes or no when it comes to ratings for performance management?

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Shirvani - 01:46
Yeah, that's a really good question and it's quite a complex topic and it has changed a lot over the years. In the time I've been doing human resources, I have seen ratings being the be-all and end-all. I've seen them disappear and companies move away from them, and I've also seen them come back.

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Shirvani - 02:05
So maybe I'm a bit old in this space, but if you ask for my personal opinion — if I have to get off the fence — I think I'm a no-ratings. And it's not as binary as that sounds, and what I mean by that is: I think it's super important in a company to always identify your top talent, your cream of the crop, who probably drive your strategy forward, who do the most dial-shifting pieces of work to actually make the company go from here to here.

And I also think it's really important, and good hygiene, to always look at poor performers. I know it's hard to say, but people who aren't quite the right fit or the right skill set for the roles they're doing, and to help them be on another journey. Right? So those are really important.

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Shirvani - 02:53
I think when I say I'm no-ratings, it's that middle group. It's kind of your… if you have a traditional one-to-five scale, it's your threes and fours. And I feel like having ratings and boxing people in like that is really not productive. Like, you know, what's the reason you do it?

For me, a lot of companies anchor their compensation philosophy on ratings, whereas I've got a mindset of: look, let's just pay to market. So you use your market data to advise on your compensation. And that's really clear. Now, if you want to pay for performance — if you know who your key amazing people are — you can also layer on additional compensation. So I think it solves for that.

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Kahina - 03:37
Because I was going to say, we've been talking a lot about this internally as well, and we're in a model that you just described. And then we're seeing some people getting maybe a bit demotivated because they were strong performers many years ago, I'm talking, and not necessarily seeing their compensation being linked to it. So maybe there was a layer that was missing and that's what we're trying to solve for.

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Shirvani - 03:56
Yeah, yes. I mean, I say for sure: I think you layer on, for the high-performing people, on top of your compensation framework, which is really getting to true pay-for-performance. Yeah. What else can I say?

I think, you know, if you don't have ratings — I talked about the compensation part, right — but the other part is: how do you know people are doing well? And for me, I don't subscribe to only, you know, twice a year or maybe if people do it quarterly, to have these formal conversations to tell you if you're on track or not on track. I believe in regular, good-quality conversations all the time with your manager.

Kahina - 04:37
I believe in that too. However, once we've said that, in reality, things are more tricky and some people are not having those conversations regularly and some people are not providing the constructive feedback because it is hard and because things are going fast and because we have tons of really good reasons not to get there.

So how do you bring people to have those meaningful, constructive conversations on an ongoing basis?

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Shirvani - 04:58
Yes, absolutely. So I have done this once in the past — or actually twice in the past — and how I've achieved that when I've got rid of ratings is replaced them with these good-quality conversations. But it's not just “we just say it” to our people leaders. We defined what a good-quality conversation was, and it's got three elements which, if you want me to go into detail, I can. There are three elements to it.

And then we stood up some significant investment in training, in how we got our leaders to understand that, to get upskilled in that, and then actually mandated them doing it. And that was extremely successful.

Just very quickly, the three elements I would say as part of a good-quality conversation are: managers setting very clear goals for their people — and not the traditional annual KPIs, though I…

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Kahina - 05:49
I was just going to say, that's something that's hard for a lot of leaders or a lot of managers, setting goals. And some people will have a type of work that would command goals on a weekly basis and others maybe on a quarterly basis. And this could change within the same team. So tell me more.

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Shirvani - 06:03
Took the words out of my mouth. So the reason we say goal setting on an individual basis rather than the traditional KPIs you have once a year and you get rated against is because exactly what you just said. You might have a goal that's a three-week goal because that's the project you're working on right now. I might have a six-month goal because I've got a much longer, more complex project I'm working on.

Managers need to be quite tailored so you're clear what you're doing by when, I'm clear about what I'm doing by when. And the first part of that conversation is giving that clarity about what they're supposed to be doing, clear about timelines and execution. And in those regular check-in conversations you want the manager to focus on how you're tracking.

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Shirvani - 06:48
Have you got any roadblocks? Is there any performance issues? All the time. Again, not just at the end of a project or once-a-year formal review. Just quickly: the other two parts of the conversation, or good-quality conversation, are about development of the individual.

So we want our leaders to always open up a space for development conversations. Now, if you're having a weekly one-on-one, you're not going to talk about development every week. You might only add that bit in once a month or once every two months. And the same with the last element, which is two-way feedback. I think if a manager and employee can get comfortable — and, I guess, trained — on having good feedback conversations with each other, it's that foundation of trust that gets built.

And honestly, to me, that's the fundamental. Any high-performing team — if you've got trust across the team or trust between a manager and employee — to me it's table stakes to then having a great relationship and high-performing team.

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Kahina - 07:46
So when you talk about two-way feedback as being the third component of a valuable conversation, are you referring to conversations, two-way feedback between an employee and their manager? Or are you talking also about feedback amongst employees, peers, stakeholders? How do you see that?

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Shirvani - 08:01
Right, in this context I'm talking about manager and employee. I've got a strong view we should have a strong feedback culture, for sure. But in this context, when I'm saying, you know, again, you don't have ratings — what do you replace it with? You replace it with great-quality conversations, and that two-way feedback is one element of a great-quality conversation with your manager.

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Kahina - 08:23
I have so many follow-up questions because it's really part of our day-to-day thoughts. You're talking about building a culture of feedback. Now, how does that happen? I mean, we've been working on this for years. I know a lot of people are trying to build that. People come from different walks of life, different cultures, different work cultures. Some people are much more comfortable doing that than others.

What have you experienced in that sense and what has worked for you?

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Shirvani - 08:50
Yeah, it's really hard to do, I would say. And it makes people feel very uncomfortable and expects them to step out of their comfort zone — for the majority of people. Right. And when you work for a global company as well, there's a lot of cultural nuance there. So what's normal for someone like myself, from New Zealand, a Kiwi, that can probably be more comfortable having a transparent conversation, versus someone that's maybe in Tbilisi, a Russian background, who are probably a lot more conservative in how they want to give feedback, especially in hierarchical layers.

It's challenging, but I think the answer is to lean into it. You make a decision: you want a culture of feedback, then you start talking about it, you name it, you provide upskilling, and you force people out of their comfort zone a little bit.

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Shirvani - 09:35
And if you just do that and you are consistent, it eventually sticks. Right? Anything you're consistent about adding to your culture eventually becomes part of it, as long as you don't just launch and forget.

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Kahina - 09:48
It's interesting. Throughout the years, as I was saying, we've been experiencing different types of performance management cycles and at some point we did not have ratings. So just like you mentioned before, we took it away and then brought it back. And when we had taken it away, it had to do a lot with our vision around the fact that we want people to have intrinsic motivation rather than carrot and stick, and that this pays off better in the long term.

However, we live in a world where there is a lot of short-term gratification and a lot of short-term carrots and sticks. So I'm curious to see, when you did — because you told me that you did it twice, to kind of remove the ratings from work environments — what emerged? What did you observe?

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Kahina - 10:28
What changed?

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Shirvani - 10:30
I think what changed was less anxiousness from our staff around the performance rating end-of-year conversations. Because what happens, I believe — again, I'm talking about those threes and fours, right? If you're a poor performer, hopefully you know before the end of the year you're a poor performer. If you're a superstar, you probably also know you're a superstar, and we will identify, like I said, these people and reward as appropriate.

I think what it changed was the majority of the organization. So probably about 80% of your organization coming to the end-of-year conversation in, like, an "away" state. You're coming to prove yourself to your manager around: What did I do all year? How do I justify to you that I should be at, you know, the highest rating I could be?

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Shirvani - 11:18
And even the mindset is… it's odd from the beginning because they're coming in to prove something, right? Whereas if you're having these regular conversations and you come to the end of the year, you already know how everyone's tracking. You can truly have a genuine conversation about how your year went, what's your focus for next year. And there's less tension about putting you in a box and a number against you.

And for what reason? I almost don't understand why we have to say, "Karina, you are a three for all these reasons." And also, from my experience, managers hate having those conversations. Even they feel forced to have this rating, and then they hate telling someone, "Oh, you're a three. I'm going to tell you why you're a three and why you're not a four." And it's really difficult.

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Kahina - 12:03
The way I see it is that it's kind of a plan B, in my view — and I have to be honest, we currently have that system internally — and the reason why, I think, is that when I say it's a plan B, it's if you cannot truly implement the feedback culture that you're referring to. I feel like it's the second-best thing in the sense that it provides clarity. And, you know, as Brené Brown says, "being clear is being kind." And that's something that people are craving — clarity.

Right: Am I meeting expectations? What were the expectations? And so it kind of provides guidance. It's not the best way, I agree with you. Personally, I've just found it very difficult to implement it differently. But it's true that at least it gives something.

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Kahina - 12:41
The other thing that I'm thinking of — and maybe it's not a good reason, I'm being transparent — is that at the executive level there's an interest to have access to data points out of our business, right? What's the percentage of our people who are a three or a four or a two? And that provides… and I'm not saying that it's bad or good.

I'm also noting, though, that in an executive setting — and you know that as well as I do — having tangible quantitative data to share makes things real, of course, and clear. And when you don't… I'm thinking also about engagement: you know, we have surveys and we do, and that helps a lot because we have qualitative and quantitative data that we can bring to the table at the exec level.

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Kahina - 13:18
And right next to the ARR conversation and the billings conversation, we can also have those conversations. So maybe that's one pro I would argue.

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Shirvani - 13:26
Look, I agree, but I'm a big fan of: if you're going to collect data, you've got to do something with it. And I would almost argue: what do most companies do with the data on the threes and fours?

So again, the low performers we should, in a good healthy way, take action on. Most companies should do that. Again, your really key people probably get the opportunity to get into more projects; hopefully they get a pay-performance kind of link. But with your general mass, even if you do rate them, generally we don't stand up much investment or programs against that.

So I don't take that away. We've got our cream-of-the-crop rating at the moment — we call it "change makers" at Lightspeed — and we do invest in that every year. We've got a whole paper around…

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Shirvani - 14:13
Okay, this is what we want to provide to our change makers to retain them. Our poor performers, we want a plan to actually lift them up, and if that doesn't work, obviously we should part ways. But we don't then take material action on the middle group. And so again, that's half my point. Are we collecting data or giving ratings for a big group that we then don't take action on?

Now, I'm not saying everyone doesn't do that. I'm just saying I haven't — or the companies I've been in haven't. So that's why, another reason, I look at it as: if you collect data, you've got to do something with it.

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Kahina - 14:45
And I guess many companies, what they do with it is that they link it to compensation, right? That's their action item, I would say. Now, is it good or bad? And then it goes back to the intrinsic and extrinsic motivation piece that I find tricky. But it's true that I think a lot of people use it in that way, you know.

Yeah, it's very interesting. You were talking about the fact that you were intentional about bringing a feedback culture and then you would upskill people and you would create programs to help people. Can you get a bit more into detail on that? What does it mean to upskill people to be able to have good conversations?

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Shirvani - 15:17
So, like I said, when we labeled it "great-quality conversations," we defined literally three elements of it that I outlined before, and each one had a module of upskilling. So the first one is the most important — about giving that clarity and purpose, which I know you want to talk about today, so it could be a good segue.

But giving that clarity and purpose to an individual is, first and foremost: do they know why they come to work, what they're doing, when they need to get it done by, how it links to the company strategy — that's critical. And so we literally just had training and upskilling around teaching leaders how to do that. Same with the development opportunities for staff — we trained on that. And the two-way feedback — we trained on that. And we keep retraining.

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Shirvani - 16:06
And the only thing we overlaid over all of this was mindset. So we introduced models that worked really well, around, you know, growth mindset, around the SCARF model, to help things. And that kind of overlaid the whole program.

And so it was quite a defined program and it was one of the most dial-shifting things I've done for leadership because we put so much effort into it. And it wasn't just a course you go on or a training session you went on and you forget about it 10 minutes later. It was fundamentally changing how they liaise with their employees on a daily basis. And that's the most powerful thing I've seen to date that I've personally done.

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Kahina - 16:42
And what was the impact on employees? What did you notice? I mean, you said there was less anxiety…

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Shirvani - 16:50
What I noticed was yes, of course, less anxiety at a rating period. However, also execution — like cadence. People were very clear about what they were doing. They got support earlier. Managers could performance-manage better. Execution, in terms of velocity of getting work done, was better because again, it was just that regular conversation all the time.

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Kahina - 17:15
It's interesting because one of my takeaways from this conversation we're having right now is the importance of a tailor-made approach. You're talking about some employees will have goals for three weeks, others will have for three months. So that means that there's no one-size-fits-all when it comes to, let's say, follow-up conversations even, maybe, and when we talk, right?

But I think it's interesting because you're in a company — how many employees at Lightspeed?

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Shirvani - 17:35
3,000.

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Kahina - 17:36
3,000. See, so you're able to… I don't know if you're doing it exactly this way at that scale, but it's interesting to just fathom the idea that maybe it's feasible. And instead of trying to find the cookie cutter, which is something I'm just thinking out loud because it's making me think about stuff, maybe it is not more work to do it in a variable way depending on your direct reports.

But I think that we're so used to trying to find a systematic approach that will work for all, and maybe that's also one of the shortcomings.

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Shirvani - 18:03
Yes. And when I've seen it in the past — you know, I've been in banks and things like that where you set the annual KPI, you get measured at the end of the year — and I would say, more often than not, most of the effort at the end of the year goes into managers justifying why the employee's goals moved. The company made a different decision, we did this… so it's all just subjective stuff at the end anyway.

And the admin that goes around that process — and especially when you're in tech — goalposts change, and they should change. You should be agile and change your goalposts if things aren't working. And therefore people's priorities, if they were set at the beginning of the year as a KPI, are likely going to change by the end of the year.

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Shirvani - 18:44
So again, if you're just stuck in this traditional "I'm telling you at the beginning of the year what you need to do, these three things, and in 12 months' time is what you’ll be measured on"…

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Kahina - 18:50
Yeah, yeah. And then life is what happens while you're busy making other plans. And then you made your strategic planning and then life happened and then you're readjusting anyway.

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Shirvani - 18:56
Correct, yeah, yeah, exactly.

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Kahina - 18:58
Another topic that I think you and I have in common — because we've talked about this already — is the importance of being purpose-driven and mission-driven when, I think, finding our own work, leading teams, and so on.

In a previous episode, we spoke with Mike Ross about meaning at work, meaning in work. It was a super interesting conversation we were having. I'm curious to hear you on the practicality of things, and maybe I can also share a little bit about what we've experienced. But how do you help or how do you catalyze or enable this approach of being meaningful in the work and helping people find their purpose in work or at work?

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Shirvani - 19:35
I think that employees finding purpose in a company is an interesting concept and a very important one, of course. I also think it's not always the employer's responsibility. So what I would say to any of my friends that talk to me about this, I would say: choose a company you want to be at. Right?

So choose a company that you are passionate about what they do and, most importantly, do you align with their values — and what they're trying to achieve from a product perspective if it's a tech company — and also values on how they think about the customer or how they think about employees as well. So I think that a lot of it should be on individuals to make that call.

I think with that employer lens, I would say our responsibility is to provide clarity.

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Shirvani - 20:24
Are we providing a good, clear vision and mission? We're just about to launch a new one for Lightspeed and, as a result, also launch a new employee value proposition around "Why come to Lightspeed? Why stay at Lightspeed?" And I think it's our jobs as executives of the company to make sure people want to be there. They're clear about why they want to be there. They're excited about the future, so the vision is exciting, and we repeat that all the time.

So everyone that comes to work every day, that contributes, they know their work matters every day towards the mission of the company. And so I don't know if I'm answering it in a way you expect, but yeah — just…

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Shirvani - 21:04
Just having a clear vision and mission is really important, but also anchoring if you even want to be there. Employees also need to want to be there.

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Kahina - 21:12
It's very interesting because this is kind of circling back to my conversation with Mike Ross in a previous episode when we were talking about the difference between meaning at work and meaning in work. And so meaning at work is pretty much what you just talked about: the company that you're joining, the values of the company, the fact that the employee has to make the choice about the company they join, what the company can do to make it clear and to disseminate that information.

And then there's the other part, which is the meaning in work. You know, I'll give you an example of myself. I used to be a lawyer. If I had been a lawyer at Workleap, I would be miserable. Even if the values aligned with me, maybe I would have stayed a bit longer because I didn’t like being a lawyer.

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Kahina - 21:47
So the meaning in work was not there for me, while the meaning at work, let's say, would have been there for me. So I think that it's really interesting to kind of, you know, join the two.

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Shirvani - 21:55
Agree.

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Kahina - 21:56
And then how do we help people realize that and shed light on what they're interested in and, to what extent…

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Shirvani - 22:04
Absolutely.

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Kahina - 22:05
Is it the company's responsibility and the employee's?

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Shirvani - 22:08
Yeah. And I think what I would say to that — you know, how I talked about these great conversations managers should be having, and the second part was around development — I can't tell you how many times I've sat down with my own people and asked them questions around, you know, "If you won the lottery, would you still be doing this job?" And if the answer is no, I want to help you find what that is.

And I've actually done that. You know, I've worked with someone who wanted to be an executive coach, and in her development plan was her plan to start her own business. And so again, I think managers can be such a powerful asset to helping people understand — whether they clock it themselves or not — whether the role is right for them, whether they're enjoying themselves.

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Shirvani - 22:51
And I talk about that often, you know. Helping people make a decision if the role is not right for them is also — or the company's not right for them — that's a really powerful thing to do for a human, and not thinking about people who are just "employees."

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Kahina - 23:04
Yeah, it's true. And I think that it also pays off for the company as well because having people — and I mean, I've always made the joke, but if I had worked half the time that I work now when I was a lawyer, I would have had four burnouts just because I was not getting energized by the type of work I was doing.

You know, so it doesn't help the company either to have people who are kind of dragging themselves to work every day. So you've mentioned a few times you've talked about learning and development. I've heard you talk about that ever since we started the conversation. So I'm curious to hear your thoughts on internal mobility.

In my company we've been talking a lot about this lately because, one, we are very drawn to external talent in a way because they've done things elsewhere, they're going to bring in their expertise and their knowledge and maybe they'll do copy-paste and whatnot. Right. And at the same time we do have internal talent sometimes that just need a bit of runway to be able to get to the next stepping stone, to be able to provide a lot to the company while already being aligned with the values, already knowing, and maybe also from transferring departments, being able to bring on their knowledge.

So it's like philosophically completely obvious that this makes sense, and yet in practice sometimes it is tricky and difficult. So I'm curious to hear your thoughts on that and also how do you put it in practice in your organization?

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Shirvani - 24:13
Of course. I think leadership has got a responsibility around providing development opportunities for their people. And, you know, I think about development as wider, not just linear for promotion. So that's really important. So I would always anchor on making sure any good company gives all these opportunities and upskilling for their people, for sure.

I think about mobility though — it's really nuanced and it depends on the company and where they're at in their journey. So if you are a far more stable company, just say you're a telco, you've been around for 80 years, growing talent internally, giving the opportunities — you've probably got far more patience and time to be able to do that, right? You've got really steady revenue streams, you're very sophisticated.

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Shirvani - 24:58
I think if you're in smaller companies or more startup vibe or you've got a challenge and you're really trying to win, I think companies don't always have the luxury to only take the time internally to develop. So I think while we should always have a lens of rewarding our great people and giving opportunities, I definitely think at times, if you're under pressure and you've got something new or a new strategy, you don't want to wait five years for someone to trial-and-error to get to that skill set. You want to buy in that skill set — someone who's seen the movie before, who's got all the learnings already and they come in and they can take us from here to here really quickly.

And I think it's a balancing act.

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Shirvani - 25:36
So it's where the company's at in their journey, but then also the role. You know, if you've got a really dial-shifting role we've got to act fast on, I will probably anchor on buying in the talent. And it's hard. And then at times where you can take the opportunity to slow down and grow to reward a really great person, we would do that.

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Kahina - 25:54
But it's interesting because we're talking about buying the talent. And of course, I very much agree with you that at times that's the way to go about things. And at the same time, I've also seen very many instances in which we glorify a little bit the "copy-paste," I'll call it that way: "I've done it elsewhere and I'll just do it here." And we know that's not the way organizations work.

And if I can do an analogy with my former life as a humanitarian human rights lawyer, I would see people who had, let's say, worked in the Congo and then they were living — I was in Haiti at the time. And they'd be like, "I've seen this, I was in the Congo, I'll just copy-paste and I'll bring it to Port-au-Prince and it'll be fine." Absolutely not. Really.

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Kahina - 26:31
The history is different, the culture is different, the taboos are different, the traumas are different. And I feel, for me, an organization is a little society in itself.

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Shirvani - 26:38
I know.

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Kahina - 26:39
And, you know… yeah. So I find it fascinating. And at the same time, I have a colleague who always says experts can also be conservative, because they know. So they come in and they… and it's not true for everyone, but there's also a risk associated with that.

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Kahina - 26:55
Yeah.

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Shirvani - 26:55
100%. I think, again, it depends on level. And I'll talk about at an executive level for a minute. I think, if I… and no, this is not relevant to everyone, but I think how I think about buying in the talent or the skill set is about someone who can come in, listen to what the company needs, and draw on the experience to help develop something.

I agree with you on the copy-paste. I can promise you any person who has come into Lightspeed and didn't want to listen for a minute and just copy and paste did not work out. It did not work out. And so I would say that — I guess that's how I'd answer that. You don't want someone who comes in and can't even listen. But I think that's what you look at from an interview process: you go, "Is someone bringing the experience and can they use that experience to help us navigate, versus they're just going to come in, 'I know it all,' and copy and paste?"

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Shirvani - 27:36
You go, is someone bringing the experience and they can use that experience to help us navigate, versus they're just going to come in, "I know it all," and copy-paste.

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Kahina - 27:45
Therefore, do they have openness? Can they listen?

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Shirvani - 27:47
Absolutely.

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Kahina - 27:48
Truly listen? Can they nuance things? Those are all skill sets that we have to look for, for sure. Absolutely.

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Kahina - 27:53
Thank you so much, Shirvani, for the time.

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Shirvani - 27:56
I really appreciate it.

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Kahina - 27:57
It's been great. Thanks.

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