Meeting predetermined goals in order to increase salaries will likely not drive innovation.
How to set an effective performance review system: 1. Be extremely selective with hires through a rigorous interview process and attract top talent with thorough and informative job postings. 2. Use the OKR framework to set goals. 3. Give feedback or review “in the form of appreciation, coaching and evaluation” rather than monetary compensation. 4. If an employee refuses to adjust following managerial feedback, don't hesitate to fire them. Ultimately, these tasks are necessary to developing effective feedback loops.