Defining Performance Levels
Defining different performance levels, usually with associated titles, is a structured approach used to assess, categorise, and communicate the performance of individuals and teams within an organisation. It helps in identifying performance trends and guiding development and rewards.
Goal
The goal of Performance Levels is to standardise performance evaluations across autonomous teams, ensuring fairness and transparency in how performance impacts career progression and rewards.
Context
Organisations with product teams are flatter than traditional hierarchical structures, because individuals work in cross-functional teams rather than in functional hierarchies. This structure requires a clear and consistent approach to evaluating performance, as it can be challenging to compare individuals across different teams.
The Radford levels
The most widely used industry framework for performance levels is the Radford career ladder. Most tech companies map their internal levels back to Radford for compensation benchmarking, even when the internal titles look different. The levels for an individual contributor are:
| Level | Typical title | What changes at this level |
|---|---|---|
| IC1 | Entry | Basic capability in the discipline. Solves well-defined problems under direction. Writes simple code, designs simple components, follows established processes. |
| IC2 | Junior | Proficient in the core toolset. Solves medium-complexity problems with some direction. Begins to design components and ask their own questions during research. |
| IC3 | Intermediate | Solves complex problems independently. Designs systems and components. Writes maintainable, well-tested work that meets the team's standards without supervision. |
| IC4 | Senior | Tackles ambiguous, cross-functional problems. Architects larger systems. Sets standards rather than just following them. Mentors more junior practitioners. |
| IC5 | Staff / Principal | Solves novel, company-wide problems. Influences industry-wide best practice. Acts as a thought leader inside multiple technical or research domains. Often pairs with the Enabling Team to set the bar across Stream Teams. |
Levels above IC5 (Distinguished, Fellow) exist but are rare and usually awarded for significant industry-wide contribution. They are a useful aspiration rather than a routine career step.
Sub-steps within a level
Promotion between Radford levels can take several years, particularly at IC3 and above. This creates a fairness problem: a person can be operating clearly at the top of IC3 for two years before being promoted to IC4, with no compensation movement in the interim.
A useful pattern (popularised by Shopify's mastery framework) is to introduce sub-steps within each level. Each level is split into 5 bands of 10 mastery points (1–10, 11–20, 21–30, 31–40, 41–50), and the bands are evaluated against four dimensions:
- Technical knowledge: depth and breadth of expertise relative to the level.
- Problem solving: the complexity and novelty of problems the person can solve.
- Decision making: the scope of decisions the person can be trusted to make alone.
- Leadership: the extent to which the person empowers and motivates others.
A person at IC3 with mastery 21–30 is operating clearly above the IC3 baseline but isn't yet ready for IC4. They get a salary increase that recognises their growth without a band promotion. A person at IC3 with mastery 41–50 is effectively operating at IC4 and the next conversation is the promotion.
The sub-steps don't replace the Radford levels; they make the time between level changes navigable for both the person and their manager.
Mapping to compensation
Compensation has two parts: a band based on the Radford level and a position within the band based on the sub-steps. Together they produce a continuous compensation curve that reflects continuous growth, rather than a step function that rewards only promotions.
This matters because:
- People at the top of a band who don't get promoted feel under-compensated and leave.
- People at the bottom of a band who recently got promoted feel over-compensated and disengage.
- Continuous bands let the compensation track the actual growth, which makes the system feel fair to everyone.
Inputs
| Artifact | Description |
|---|---|
| Industry Benchmarks | External data on performance levels and titles in similar roles across the industry. |
| Detailed Job Descriptions | A formal document outlining the role's responsibilities, required skills, and qualifications. |
Outputs
| Artifact | Description | Benefits |
|---|---|---|
| Performance Levels | A structured framework defining different performance levels and associated titles. | Standardised performance evaluations, clear career progression paths, and fair rewards. |
Anti-patterns
- Too Focussed on Hard Skills: Overemphasising technical skills and neglecting soft skills like communication and teamwork.
- Infrequent Calibration: Failing to regularly review and adjust performance levels, leading to outdated evaluations.
- Lack of Transparency: Not clearly communicating the criteria for each performance level, causing confusion and dissatisfaction.