Jack Dorsey tells Block employees he’s ending performance reviews, PIPs in favor of ‘parting ways immediately’

He also named Dhanji Prasanna, a longtime Block employee and its chief scientist, as the company’s new CTO. The changes come just a few weeks after Dorsey told staff that he’s reducing headcount by about 10% over the coming months, as Business Insider reported.

Going forward, Block will rely on constant evaluations of workers to get past a perception that Block allows staff and managers to “‘rest and vest’ throughout the company,” Dorsey wrote. Should an employee be found to not be meeting expectations, they can be fired or let go immediately, without having to wait for formal feedback during a review cycle or put on a performance improvement plan, commonly known as a PIP. Block will no longer put any workers in the US on a PIP, the note said.

“It’s a lazy and often surprising approach that we can avoid with direct and consistent feedback,” Dorsey said of PIPs.

“We want to help everyone achieve excellence here at Block,” he added. “And if that’s not possible for any one person, we want to acknowledge that, and part ways without delay (which is a perfectly fine and honorable outcome.)”

A spokesperson for Block did not immediately respond to a request for comment.

Other changes to be implemented starting next year include introducing performance ratings of “meet, exceed, or fall below,” and each employee will be able to see their rating.

“That ensures we can have a fair two-way conversation holding each of us accountable to always raising the bar,” Dorsey said.

See below for Dorsey’s full note sent to employees:

I want us to build a culture of excellence.

Excellence in service to our customers, excellence in our craft, excellence in our respective disciplines, and excellence to each other.

We want to help everyone achieve excellence here at Block. And if that’s not possible for any one person, we want to acknowledge that, and part ways without delay (which is a perfectly fine and honorable outcome.)

Our current “performance management” practices do not help us achieve this. In fact, they are holding us back. Some have described them as a “denial of service attack on managers” given the time commitment versus the benefit to our people. There’s also a perception that we allow people to “rest and vest” throughout the company, including poor managers who oversee great and promising individual

As we kick off our “annual performance review cycle,” we’re going to make some changes.

First, this is the last “annual performance review cycle” we’ll have. It’s way too heavy for everyone involved and it doesn’t actually help us get better. Performance should be continuously evaluated, and feedback should not be queued up for later. There are natural and asynchronous milestones that are specific to individuals and teams, like launches or product completions, that will force our leads to be more specific and personalized with feedback, promotions (which need to be dramatically simplified!), compensation, or whether to part ways immediately (instead of letting things linger). Of course, there are things like calibration across disciplines that require a synchronous action, but everything else should default to asynchronous and personalized to the individual. We’re working through how this will work in practice. The People team will follow up with more details before the end of this year.

Second, we’re going to introduce performance ratings that will be visible to each individual employee. Everyone deserves to know where they stand and how to improve. This will help both the individual and manager have a conversation, and gives us more insight into how well the manager leads their people. We’re going to start with 3 ratings which will replace the compensation designations we’ve used in the past. The clearest and fairest way I think about these is through expectations: I meet, exceed, or fall below the expectations set with my lead (exceeds, meets, below). That ensures we can have a fair two-way conversation holding each of us accountable to always raising the bar.

Third, as we have a clearer and continuous understanding of where each of us are, we’re going to end Performance Improvement Plans (PIPs) in the US. We haven’t seen these plans actually work consistently, as they often feel too late and don’t push the manager to give feedback in a timely manner. It’s a lazy and often surprising approach that we can avoid with direct and consistent feedback.

Fourth, we build things. Specifically, we build technology things. Therefore, we will invest disproportionately into design and engineering disciplines. I just want to set that expectation going forward. And we’ll need more focused help to do so, which is why we’re going to create a new role at the company, one that’s responsible for our overall engineering excellence, technical strategy, and who will oversee our shared technology platforms across business units. Many companies call this a “CTO.” Titles don’t matter…responsibilities do.

I’ve asked Dhanji Prasanna (cc’d…sorry Dhanji!) to join my direct team and take on these responsibilities for Block. Dhanji is technically excellent, has served since 2011 in Square, Cash App, and TBD…and most importantly is an excellent human who’s a “show, don’t tell” type of leader. Dhanji won’t have all of engineering reporting to him, but will instead focus on our engineering culture and practices, our development tools and increasing productivity and velocity, and our overall strategic direction inclusive of AI and shared services like Fe and InfoSec. We’ll organize a Block-wide engineering all-hands soon to introduce/reintroduce Dhanji to all of you and discuss the problems we’re trying to solve.

Finally, an most importantly, we’re only as good as our leads and that’s where we’re going to focus a majority of our attention as we evaluate our performance and push to drive excellence. Leading is a privilege with immense responsibility. If we don’t have the right leaders and can’t evaluate them against an ever-increasing bar, everything suffers. We will not tolerate mediocrity or low performance from our leads. You have my commitment that we will hold a very high bar to all of them, and act extremely fast if things are clearly not working out.

And of course…that includes me. As I do every year, I’m sharing my annual performance review with you all (attached). Read if you wish. I’d focus more on the direct feedback quotes than the narrative (which sounds way too positive to me. Summary: folks want me to work on 3 things this year; driving results, decision making, and being more inclusive across business unit lines. I have a lot more to do, but I believe the actions we’ve taken over the past 2 months have hit on all these three themes. I know it feels like a lot of change at once, but I believe this urgency will help us and our customers dramatically.

Thank you all, jack

Are you a Block employee or someone with a tip or insight to share? Contact Kali Hays at [email protected], on secure messaging app Signal at 949-280-0267, or through Twitter DM at @hayskali. Reach out using a non-work device.