Scrap annual rated performance reviews – then what?

Life after you scrap annual rated performance reviews

Will you follow Deloitte, Adobe, Microsoft and Accenture and scrap annual rated performance reviews? If so the question is what to do next? Organisations are nervous to scrap annual reviews as:

• They want a fair and validated way to distribute compensation increases
• They need a record of low performance when dismissal is required
• They need performance data in an employee’s file for succession planning, promotions and career development
• They need a way to assess whether managers are doing their jobs well.

Times have changed. More and more organisations are radically re-engineering their performance appraisal processes as research and best practice shows:

• Employees need and want regular feedback (daily, weekly). A once-a-year review is not only ineffective and too late but it’s often a surprise. Regular coaching is the key to strategic alignment and performance.
• Managers cannot effectively evaluate an entire year in one sitting, so the annual review is awkward and uncomfortable for both the manager and the employee.
• The manager/employee relationship is not as exclusive in many organisations as they used to be. Many employees work as part of numerous teams during the year, so one person cannot adequately rate an employee without additional input.
• Some employees are a poor fit and may perform poorly but these issues should be addressed immediately, not at the end of the year.
• In organisations with a lot of high performers, forced rankings eliminate great and skilled people and ends up damaging the culture.
• We are inspired and motivated by positive, constructive feedback but many “appraisal” processes end up working against this.
• A key part of an appraisal is the development conversation (what can be improved and what is required) but this is often left to a small box on the review form and is not always honest as it can negatively impact ratings

Admittedly, not every manager (or employee) is equipped to conduct meaningful, career-advancing conversations right now. We can’t just tell everybody to start talking to each other and they will do it effectively. We need to create a system that works for our organisation and supports meaningful conversations. We have to develop the skills and provide people with the tools to help people give and receive meaningful feedback. At Adobe, eliminating the formal performance reviews has had a positive impact on a number of key indicators. A key indicator that was of major concern was the spike in resignations directly after their traditional annual performance reviews. Since implementing their check-in approach this voluntary attrition of skilled people has reduced by 50%. The new system requires leaders and managers to have regular “difficult conversations” with employees who are struggling with performance issues, as opposed to putting them off until the next performance review cycle comes around.

If you are looking for a solution to radically re-engineer or Scrap annual rated performance reviews in your organisation contact us today.

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Richard Riche

Change Communication and Employee Engagement specialist at One Clear Message Consulting

Richard specialises in helping you build real human communication skills. Employee Engagement / Experience, Emotional Intelligence skills, building high performance teams and a great place you want to work. TED style speaking and presentation skills. Training, consulting and coaching.

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Latest posts by Richard Riche (see all)

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