Expedia Inc. eliminated performance ratings for most of its employees as the company focused on feedback and coaching to create a new performance culture, a corporate director said May 1 at the 2013 WorldatWork  Total Rewards Conference in Philadelphia.

Employees liked performance reviews, but there was a strong emphasis on creating a performance rating, with managers spending too much time calibrating ratings, said Karen Crandall, senior director of global compensation at Expedia, an online travel website in Bellevue, Wash. In addition, the performance distribution curve sometimes forced managers to give lower ratings than what they wanted to release, she said.

Expedia, with operations in more than 20 countries, decided to abolish the ratings system and create a performance program that would include company-wide competencies.

The competencies would be to add business value, which includes technical skills, creativity, business acumen and results, Crandall said. Another is to communicate effectively, and another is to “help the team win,” which includes building a team, working effectively with peers, and cross-functional collaboration, she said.

The hope was to create a performance culture that would help to improve both individual and team performance and ultimately drive business results, Crandall said. The emphasis would now be on frequent feedback and coaching and to evaluate the here and now, not just the results, she said.

Preparation for the new program included frequent communications, and requiring all managers worldwide to attend three training sessions that totaled 10 hours. The managers were expected to learn how to communicate the compensation policy and to think about pay elements holistically and individually, Crandall said. Expedia also created a video to explain the compensation philosophy and approach.

Expedia created a simplified performance rating form that eliminated having to describe performance and results, or create an overall rating, Crandall said. The form includes a section to evaluate results, or “what,” and competencies, or “how,” she said.

Expedia launched its new performance program in July 2012, which included a new site on the company intranet that was accessible to employees, Crandall said. The company chose not to implement the program during a transition period, which made management commitment to the new plan immediate, she said.

By Laime Vaitkus