Until recently, personal care products manufacturer Kimberly-Clark had a longstanding reputation for lifetime employment and job security. “That’s over,” the Wall Street Journal’s Lauren Weber writes:
One of the company’s goals now is “managing out dead wood,” aided by performance-management software that helps track and evaluate salaried workers’ progress and quickly expose laggards. Turnover is now about twice as high it was a decade ago, with approximately 10% of U.S. employees leaving annually, voluntarily or not, the company said. Armed with personalized goals for employees and large quantities of data, Kimberly-Clark said it expects employees to keep improving—or else. “People can’t duck and hide in the same way they could in the past,” said [Scott Boston, vice president of human resources].
It has been a steep climb for a company that once resisted conflict and fostered a paternalistic culture that inspired devotion from its workers. …
Since 2009 Kimberly-Clark has laid off around 2,900 mostly salaried workers world-wide, some of the first big cuts in the company’s 144-year history. It currently employs about 43,000. Remaining employees are expected to work “smarter” and meet regularly raised targets. “We have to routinely shuffle the resources and say, what’s the most important thing we need to do today, this week, this month, to drive this objective?” said Stephanie Martin,an engineer who analyzes new product ideas.
Indeed, as Weber notes, many employers have shaken up their performance management processes this year, whether by replacing the annual performance review with “continuous feedback” or by ditching or radically revamping their performance rating systems. It’s interesting to see that Kimberly-Clark is comfortable portraying its performance management shift as a matter of “managing out dead wood.” Most companies who have made this type of change try to sell it as benefiting employees—driving personalization, more transparent conversations, and so forth—and downplay this aspect of it, but of course shaking up performance management is about managing performance better.
Unfortunately, the trendy practice of abandoning ratings doesn’t seem to have the intended effect. Notably, Kimberly-Clark has not gone ratings-free, Weber explains: The organization first adopted a rating system based on a nine-box grid that proved unpopular, so it shifted to a more flexible four-rating system in 2013. Goldman Sachs made a similar change this May, simplifying and streamlining its performance ratings without discarding them entirely.