Block, the fintech giant led by iconoclast Jack Dorsey, is shaking up HR in typical Silicon Valley fashion: The company just ditched annual performance reviews and axed “performance improvement plans” – the dreaded PIP protocol for struggling employees.
Instead, Block will rate workers as “exceeds, meets, or falls below” expectations and swiftly cut anyone not measuring up.
The move aligns with Dorsey’s recent warning that layoffs are coming to Block, which includes Square, Cash App, and Tidal.
Criticism and Support
However, some HR experts argue that proper use of PIPs can rescue faltering careers rather than serve as a prelude to termination. Is Block being ruthlessly efficient or heartlessly robotic in handling low performers?
We asked Tim Paradis, BI’s workplace correspondent, for his take.
Paradis covers everything from Quiet Quitting to battles over RTO mandates. He recently interviewed a Korn Ferry executive who argued today’s employers don’t invest enough effort in formal development plans.
“Her point was: If they’re used properly, they’re not automatically a death sentence,” Paradis said. “They can be a mechanism for bosses to devise a plan with the worker.”
Block’s Approach
But Block appears to favor rip-off-the-bandage-style cuts over drawn-out coaching. Paradis speculates this will inevitably sweep out productive employees along with poor fits.
“I could see where you’re throwing good workers out,” he said, especially since imperfect spells are inevitable for even top talent.
Implications for the Industry
Other tech trendsetters will closely watch Block’s bold HR overhaul. But Paradis doubts most will follow suit. “Many larger companies have more entrenched HR cultures and policies that would say, ‘This isn’t how we operate,'” he predicts.
On the other hand, Block’s push to replace annual reviews with real-time feedback makes perfect sense to Paradis based on his reporting. “All the HR people I talked to say if you get a performance review, nothing should be surprising — there should be regular communication from your manager about how you’re doing,” he says.
So is Block’s tough-love approach to underperformers visionary or half-baked? As with most attempts to “move fast and break things,” the results remain to be seen. But some solid careers may end up as collateral damage.
