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Want to Do Away with Performance Reviews? Think Again

Most firms' performance management systems don't need to be replaced but they are crying out for change

manager-led coachingMicrosoft did it in 2013, and recent coverage would have you believe that Accenture has now done away with performance reviews for its 330,000 employees

The reality, however, is that neither of these giants has abandoned performance evaluations. But the speculation once again sheds light on a process that creates a tense relationship between employees, managers, and the company that employs them.

Chart Your Own Path

As mentioned in a lot of the coverage, Accenture is part of a small group (just 6%) of Fortune 500 companies that have limited the value they place on scores and rankings.

This latest news has caused many HR teams to take a hard look at their performance review processes. Most tend to prefer a course of modernization to one of throwing out the baby with the bath water. However, given that just saying performance “anything” causes consternation and creates a cloud over the conversation, many HR professionals are unsure what process will best help improve employee productivity.

The best advice to HR teams before they make any rash decisions about their performance review process is to stop. The firms that get the best results don’t use performance scores as the centerpiece of the discussion. Instead of using performance management as a record of past performance, they use it to improve employees’ future performance (see here for more on that).

3 Questions You Should Answer Before Making Any Changes

Answers to the following three questions will generally illuminate a path forward for most firms.

  1. Is your performance review backwards? Managers should use past performance as a guide for what they can do to help their employees be more productive in the future, rather than casting their feedback backwards and either highlighting successes or failures.

    Juniper Networks, which is a member of CEB’s network of HR professionals, has a good approach to merging an evaluation of past accomplishments with outlining the capabilities employees will need in the future (CEB Corporate Leadership Council members can see videos and case studies here).

  2. Who provides the input during a review? Managers have more direct reports now than they ever did, and employees must collaborate more with peers than they ever did to get their jobs done. Given all these changes, feedback should come from a multitude of sources (e.g., peers, co-workers, customers).

    International law firm Herbert Smith Freehills has designed its performance review process with this new expectation in mind. In their self-reviews, employees must articulate not just individual successes, but also the contributions they received from others. This signals the benefits of collaboration and the value the management team places on it. It also helps management quantify and reward this type of “network performance“.

  3. Is feedback provided constantly, or once or twice a year? If it’s only during scheduled “performance reviews,” then HR teams should think about teaching managers to provide coaching throughout the year, instead of trying to remember everything good and bad at the end. This is more valuable for both manager and employee.  This guidebook will help managers navigate performance conversations.

 

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