You are Mariana Díaz, head of People at Servicios Financieros del Caribe (SFC), a San Salvador fintech with 120 employees. In ten days, five people who had just received the top rating, a 5, have resigned. The CEO gives you US$1.5 million to rebuild the performance system, and by Friday 20 February you must decide where to look first.
The situation
SFC offers payments, credit and savings to small businesses and consumers in El Salvador and Honduras. In 2025 it billed US$15 million and lost about US$2 million. Its review system was born when the company had twenty people and has barely changed: one review a year, in February, on a 1–5 scale with no written criteria. Each manager rates their team alone, without comparing ratings with anyone else's; some objectives are measurable and others are task lists. The result is delivered in half an hour, and the raise depends on the rating: 8% for a 5, 4% for a 4, 1% for a 3 and nothing for a 2.
This year 30 people got a 5 and 60 got a 4. Of the 30 rated 5, five have gone: a senior engineer to a multinational in Costa Rica for 40% more, a product manager for 50% more, a finance manager for 45% more, a customer-success lead to a remote job for a US company, and the head of sales, to found her own company. SFC pays a senior engineer US$5,500 a month; the market pays about 6,500.
Exit interviews repeat two phrases: no progression and no recognition. The engineer put it bluntly: she got a 5 and 8%, but her manager never told her what that meant for her career. Annual retention is 85%, perceived fairness of the system 35 out of 100 and satisfaction 45. The CEO, Rafael Soto, is convinced the problem is pay; several managers blame the review format. The consultant has proposed a US$30,000 diagnosis and left the scope blank.