The Poker Chips experiment gave us a whole new level of transparency, communication, trust and performance. So much that I strongly recommend every team to try it and sustain it, but before I go into details, I must set the right context so you understand where we were coming from.

After we ditched the hierarchy and moved to a self-managed environment, we had to experiment with a lot of innovative practices to cope with the gaps that the lack of structure left us. Our teams are used to come up with many democratic approaches to make decisions and implement processes. The methods that we’re going to describe in this post need to be put in this context and must be carefully used in groups with little experience with transparency and honest feedback. For us, after 3 years playing with democratic approaches, the Poker Chips feedback was just one more thing we were trying.

One of the things that nobody was controlling in our structureless model was to make sure that everybody was doing what they were expected to do and that nobody was taking advantage of the system or derailing from the values and work required for the company to sustain its culture and achieve its business goals.

We experimented with lots of performance review exercises. To get a better context read Experiment 1, Experiment 2, Experiment 3, Experiment 4 and Candies Feedback Experiment.

If you haven’t read our previous experiments, this is a brief summary to help you get in context. We tried different ways of giving promotions by selecting the best employees democratically. We played with surveys, voted by categories and even delegated the promotions budget to the group for them to distribute but it was the Candies Exercise the one that took us to this new Poker Chips experiment. The Candies feedback, in short, is an exercise in which every team (as a whole) provides feedback to every other team (as a whole) and, additionally to the written feedback, a number of real candies is also given as a sweet rating of their performance. Typically the teams would collect those candies and all team members would share them and enjoy them together. It is important to say that the candies exercise wasn’t linked to money or promotions in any way but rather open and transparent feedback for the teams to understand how they were perceived and how they could do better.

One of the risks when creating self-managed teams is that having all members the same hierarchy can be confused with not having the right to demand accountability from others. To some degree, there is this feeling of “we are all the same and nobody can tell me what to do” or just not feeling comfortable with confronting anyone without having any real authority over that person. The way we see it, in a self-managed model, everybody has the authority to demand accountability to others, but of course, not the easiest thing to understand or do.

With this method, we make sure that everyone is aware of how they are perceived and what they need to do to improve that perception. Coming from the Candies Exercise, when the candies were collected, we raised the question to the teams “do all members of the team deserve an equal amount of candies?” or “have all contributed equally to this team?”.

We had some poker chips laying around from other workshop exercises so we decided to use those. We directly converted the number of candies received by the team into the number of 1$ coins they could use, and that would be the currency we would use for this feedback exercise.

If you wanna run this exercise from scratch you can decide the number of coins following a formula like this:

c = m * n + e

• c is the number of 1$ coins per person for the exercise.
• m is the number of team members.
• n is a variable to control the magnitude of variation. The bigger it is, the bigger gap will create between the best rated and the worst rated members.
• e is there to avoid an equal distribution by forcing every member to decide who gets extra coins. e must be between 1 and m, the closest to 1 you would foster recognition of performance above average, the closer e is to m, you would be fostering punishment for lower than average performance.

We applied the following format to mature teams, with lots of experience in providing feedback. This is how it would work for a team of 5 members:

• m = 5, n = 2 to avoid big differences in rating and e = 1 to foster positive recognition. c = 11.
• Get all team members together in a friendly environment. It can be a playroom, the park or the bar. Whatever works for you.
• Each member will get 11 coins of 1$ each.
• In turns, each member will distribute their coins to all the teammates, giving to each one, a number of coins and the justification for it. This happens face-to-face and in front of everyone.
• Once everybody distributed their coins, we compute the totals and write down the results on a board or a screen for everyone to see.
• Give some time to reflect on the results and encourage everyone to share their thoughts by asking questions such as “are you surprised by these results?”. Also, encourage team members to ask the group “how can I improve to get a better result next time?”
• Repeat this exercise often, every 6 to 12 weeks, identify trends and ask the team to define a plan that helps all team members help each other improve. It is ok and normal to have people outstanding but watch out for big differences of results or team members with recurrent low results.

Variation: of course you can sweeten it up a bit and use chocolates or any other yummy feedback unit so the team can have a feast at the end of the exercise!

Bonus: you can consider linking this to your appraisal process. In our experience, when you add money to the mix, you compromise the feedback but it sure can be a great way of running performance reviews for mature teams.

Proceed carefully! This is exercise can raise sensitive conversations and can be very awkward for an inexperienced team, potentially damaging the team moral and personal relationships. Add variations to the above format to reduce the impact if necessary. You can play with different degrees of anonymity. Start safe and send out an anonymous online survey first, where members can give each other feedback privately. Collect all the feedback given and have it discussed by the group without disclosing authors. After some sessions like that, when the team is ready, introduce the coins and just ask team members to put the coins in a box or behind the teammates’ back while seating in a circle on the floor. Eventually, with more experience, gradually open it up until you reach full transparency and one-to-one communication. Do not link this exercise to money or promotions if the team hasn’t practiced it before and feels comfortable with it.

In conclusion, this exercise is extremely powerful. It keeps everybody aware of how they are perceived in the team, allowing them to continuously improve upon feedback and making sure that all team members are meeting the team’s expectations. Running this exercise we had cases where low performers who would have been terminated overtime, had the chance to react and become valuable members of the team. We also had cases were low performers were never able to match the team’s expectation and had to eventually leave the team. Equally, we had cases of people constantly getting the highest scores in the team and that’s usually a great indicator for the team to consider proposing that member for promotions or salary increases. We consider that mastering this exercise is essential for the success of our teams.

At this point, we have experimented quite a bit with different methods and, more importantly, we have grown in terms of trust, transparency and self-management. Check out our previous experiments if you haven’t done so yet (Experiment 1, Experiment 2, Experiment 3).

This time we wanted to tackle one of the flaws that all of our previous methods had, and that is to provide recognition right after the fact and have a process that runs throughout the year rather than just once every 6/12 months. We still had to stick to the corporate annual budget cycle so this is what we did:

8 Stars

There are a couple of things that made us create a “currency” for appreciation. After we ran Experiment 3, participants, in general, expressed that they didn’t particularly enjoy to use direct cash because it made the exercise too much about the money and deviated the attention from the recognition itself.

In addition to this, we don’t always know the available budget, when will be approved, how much it will be or even whether we’ll have one. It’s easier to have an artificial currency that you can exchange for real cash once your organisation has the money ready for it. So receiving a star will be seen as recognition and even though it will be converted to money at some point, it is nice to be recognised right away and enjoy that bit without thinking about money.

Why 8? That’s a great question. We used our gut feeling and previous experience on this. In Experiment 1 you could mention 3 names, in Experiment 2 you could mention up to 15 names and in Experiment 3 there was no limit in regards to how many people you could include in your distribution. With all that in mind, after studying how people behaved in these experiments and also considering how much budget we would typically get for increases, we decided that 8 was a good number both for having a reasonable monetary value when we convert it but also to convey that a star is valuable. Having only 8 for the whole year would make everyone carefully think about who deserves one, rather than just give them away easily for any little thing. We wanted a star to be meaningful.

As few rules as possible

After the 3 previous experiments, the group is now mature and hence we didn’t feel like we needed to set so many rules. We wanted to give people as much freedom as possible to use their stars as they considered appropriate. Stars could be given at any time, to anybody and even several stars to the same person, as long as you didn’t give them to yourself. We only set the limit of the stars (8) and made clear that all the stars will be published, who gave it, to whom and why. Also, because humans tend to procrastinate we said that 4 stars would expire in 6 months just to avoid people forgetting or keeping all the stars for the end of the year which would defeat the purpose of moving to a spontaneous method.

Oh yes, there was one more rule, if you wanted to cash out the stars you received at the end of the year, you had to participate in this exercise, meaning that you had to give out at least 1 of your stars.

Counting Stars

When the year was over, we would look at how much budget there was for this purpose and make a direct conversion dividing the total budget by the number of stars given. Each employee would get that value for every star received. Simple.

If somebody received so many stars producing their increase to go beyond their salary range, they would get a promotion. We actually loved this because promotions are a consequence of a salary increase earned by everyone’s recognition and not the other way around.

Things we considered

There were a few things we considered that we didn’t end up implementing. You may want to try them out though, so here they are:

• Combine the stars with another method. You could dedicate a percentage of your budget to the Star Awards exercise and distribute the rest with a different method like splitting it equally among all employees to ensure a minimum raise for everyone or delegate some of it to the teams or apply a different method to that bit. Your imagination is the limit.
• Allow giving a star to an entire team and split its value among its members.
• Set limits. For example, an employee can only give out up to 4 stars to their team members but the other 4 need to be given to colleagues from other teams.

What worked well

• We didn’t have a single employee who didn’t receive at least 1 star. Most people received several during the year for specific contributions, sent by a colleague together with a nice piece of positive feedback. This really motivated people and helped us keep doing our best through the year.
• Everybody was happy for people receiving a lot of stars, they’re just great employees and teammates and if they received 20 stars it was because they really deserved them.
• The fact that the stars were public could influence people on their decision. Maybe someone was thinking of one person to give them one star but then changed their mind when they saw that they had already received a lot of them. While we were concerned about things like that happening, and they probably happened, we still think that the positive impact of sharing recognitions frequently with everyone created way more good than bad.

Not so well

• Again we didn’t have feedback about things to improve. Most feedback was to recognise something great about someone so additional methods needed to be used to fill that gap.
• With this method, we still have cases of employees that interact with many people and their exposure made them more likely to be considered by more people versus those who spend more time out of the office, with clients or more isolated who are inevitably considered by fewer people as a candidate for a star award.

In Conclusion, this method was an extraordinary exercise. The feeling of giving a star, receiving it and even seeing how others were recognised was a boost and having 8 stars per employee, we had plenty of happy days throughout the year. Still, we think we can do better and that is why we’re working on the next Experiment, one that we think will fill most of the missing pieces. Stay tuned.

We did it, we removed hierarchy and managers, we are now all equal. Great.

However, as you may already know, most content in this blog refers to a self-managed office within the context of a bigger, hierarchical organisation, our self-management can only get so far, but still, pretty fun.

Before we realise, is that time of the year when the “bigger company” asks us to submit our proposals for promotions and salary increases. There used to be a clear step-by-step process for this, centralised through the managers. With no managers, what do we do now?

To be honest, we didn’t pay much attention to this and caught us by surprise, the deadline was around the corner and we had to find a formula very quickly and send out our proposals to corporate. We decided to run a simple voting.

The process was simple, every employee could fill in a ballot entering the name of the 3 employees they thought to deserve a promotion/raise. Each employee could vote only once, votes were anonymous and hence they could vote for themselves. The name on the first position would get 3 points, the name on the second position 2 points and the name on the third positions 1 point. Next to each name we needed to enter the reasons why we are proposing that employee.

At the end of the day, we proceeded to the scrutiny, counting all the votes in front of anybody who wanted to witness it.

The results were simple, we added up all the points and produced a ranking with the top 10 employees. That is the list that would be submitted to higher management for their consideration, they would still have the final word. The full list was available for anybody to see upon request.

A few days after this process was completed, we ran a retrospective about this method, and these are some things that came up:

What worked

• Great progress consolidating self-management, for the better or worse, people were more in control than ever when it comes to deciding who outperformed. To trust them with such a sensitive topic, was consistent and giving a clear message.
• People were pretty happy with the results. People at the top of the list were highly respected and made sense to most.
• Corporate was also happy. They had a list of candidates where they could still apply their own rules, based on current salaries, seniority, recent promotions, etc.

What didn’t work so well

• Many people shared that 3 candidates weren’t enough. They had more people in mind that deserve recognition and they would have liked to include more names in their vote.
• Around ten people weren’t voted by anybody and others got very few points. Since there was only feedback given to people voted, there was nothing for the rest to work with and improve. Additional feedback initiatives were necessary for people to find out why they got so few or no votes.
• This happened at the end of the year and we know this is not ideal. People tend to reward more recent behaviour and forgets about great work done earlier during the year.
• People followed different criteria, which can be healthy but also confusing. There were some vague guidelines about what things to consider when selecting your candidates but still many people expressed very different approaches to their voting and that didn’t help towards a unified culture we wanted to create where behaviour is most important than results.

In conclusion, as a first attempt, it was a success but it clearly showed some flaws to be improved. In any case, it was very easy to set up and improvise so no excuse for not trying!

Wanna see what we did next? Check out Experiment 2