Steve Cohen is changing what it means to be a star employee

Steve Cohen is changing what it means to be a star employee.

His family office, Point72 Asset Management, is rolling out a new way of measuring performance that will identify core, necessary skills and rank them on a six-point scale.

"A job is really just a cluster of skills, and now we have a way to talk about that with a lot more precision that informs every stage of the process," Mike Butler, Point72's head of human capital management told Business Insider.

Butler and president Doug Haynes, a McKinsey veteran, joined forces with an external consulting firm, Vega Factor, to identify the essential skills required for individual roles, build an inventory of those skills across every position in the firm, and map it all out.

The new system enables employees to build career-progression plans based on their skillset by identifying what they most need to focus on. Employees can assess, for example, what to focus on as an individual, how their managers should be supporting them, and what resources the firm can provide to help.

"Like most performance management systems, ours had some characteristics that weren't really well-aligned with where we're going as an organization," Butler said. "It tended to be somewhat backward-looking, judgmental - it didn't really help people develop their skills and advance their careers."

The new program is the latest example of Point 72's efforts to revamp its culture.

The Securities and Exchange Commission in 2013 shut down its $16 billion predecessor, SAC Capital, banning the hedge fund from managing outside money. Cohen pleaded guilty to securities fraud and launched Point72 a year later as a family office to run his billions of wealth.

The firm is expected to start managing outside money again at the start of 2018, after he struck a deal with the SEC in January.

And the firm has launched an "Academy" to train the next generation of money managers, recently extending the program to recent grads in London and Asia.

The new performance measurement program assesses skills ranging from generic - like effective communication, presentation skills, and time management - to specific and technical. Butler said that when his team first started compiling the skill inventories, different specialist groups would say it was a futile task because they felt their skillsets were unique to their roles.

"But in reality when you break it down to a fundamental skill level, it's a lot more relevant than you think," Butler said.

He said that recognizing the universal nature of many of those skills helps with internal talent mobility, too. Employees hoping to move across divisions can examine their personal skills map and zero in on which skills need further development before making the move.

Skills are broken down into prioritized and not prioritized, meaning, if you're a junior-level accounting analyst, some of the higher-level skills - related, for example, to managing people - are not relevant.

"If there are 80 skills that might define your career from beginning to end for a particular role, there might be 15 or 20 that are relevant at your particular stage of development," Butler said. "The whole thing is there, you're zeroing in on the skills that are pertinent."

Six columns help gauge how well you've mastered each skill. Those include:

• Learning - i.e., getting comfortable with the skill
• Doing - i.e., performing that skill at a high level of proficiency without supervision; in other words, being a master of that skill
• Ready to teach - i.e., you're not only good at it but you have the capability to make other people good at it too
• Teaching - i.e., actually teaching that skill
• Tool-building - for example, you might find a way to automate a process or build a spreadsheet or an excel model to save time in the future
• Inventing - i.e., rethinking the work in its entirety. Not just finding ways to do the work faster or more efficiently, but taking a step back and observing changes in the industry, for example, and recognizing that a process isn't as valuable as it used to be. Fundamentally rethinking whether that task or process still servers a purpose, or whether it needs complete tearing apart and rebuilding.

"As a firm, we provide employees with the tools they need to do [their] work better, or faster, or at a higher level," Butler said. "Some are so skilled that they reinvent the skill for themselves. Most performance management systems never get beyond 'doing.'"

Point72 has introduced the program in stages, starting last year with a pilot in the operations group. This year it's been rolled out across investment services, meaning all the traditional corporate functions: finance, human resources, IT, research, strategy, and communications.

That covers about 650 of Point72's 1,000 employees. Now the firm is working on extending it to investment professionals - meaning portfolio managers and analysts. Currently the firm is building out the skills inventory for analysts, which should be finished by the end of this year. Next it will begin mapping out the analyst skills in the first quarter of 2017.

Here's what an analyst's skills inventory might include, via Point72:

• Analyzing root causes
• Building effective working relationships
• Communicating in writing
• Communicating orally
• Communicating with presentations
• Conducting research
• Escalating appropriately
• Evaluating oneself in terms of mindset and skills
• Gathering and incorporating qualitative and quantitative input and feedback
• Giving upward feedback

The new system could also impact how the firm hires new talent. The language and framework for thinking about which skills are needed for each job enables the firm to write clearer, more specific role descriptions when hiring and assessing candidates, Butler said.

The firm is even incorporating the new, more specific language into its promotion guidelines.

"I've heard people describe this as a replacement of our performance management system, but it's much more than that - it's a framework for thinking about talent through the entire life cycle," Butler said.