More and more companies are ditching the annual review, but what are they doing instead?
Accenture, Deloitte, Microsoft: just three of the household names to ditch formal appraisals from their HR toolbox. But, as the September issue of People Management revealed, just because the once-a-year sit down with the boss has been cancelled doesn’t mean these companies have abandoned performance management entirely.
The most recent company to make headlines with such an announcement was Accenture, whose 300,000-plus employees will say goodbye to traditional appraisals in September. Instead, managers will feedback on a project-by-project basis. The consultancy firm’s CEO Pierre Nanterme told The Washington Post that the old system was ‘heavy’, ‘costly’ and that ‘the outcome is not great’.
Deloitte broke the news that it was dropping appraisals in this year’s Harvard Business Review’s April issue. Similar to Accenture, Deloitte will provide feedback to its 65,000 staff after each project. This feedback will focus on answering four questions, of which two are limited to yes-or-no answers, about the worker’s performance. The professional service firm also expects its team leaders to check-in with their reports at least once a week.
Microsoft dropped forced rankings and ratings in 2013. Instead, the technology giant switched to a system called ‘Connects’ to deliver timely feedback that encourages employees to learn as they go.
And, in 2012, Adobe scrapped formal reviews in favour of more regular and more informal check-ins.
Expedia also moved away from formal appraisals in 2012, instead adopting their ‘Passport to Performance’ process. “It is continual, forward-looking conversations based on development and coaching,” Claire Ainscough, vice president of HR at Expedia, told People Management. “The advantages are that objectives can change regularly with business needs and employees can focus on what they need to do to make a difference rather than fixating on a number.”
Always one to be ahead of the curve, Google also shuns appraisals. Instead, the company asks its employees to monitor a set of self-assigned objectives and key results – known as OKRs for short. Staff aim to have four to six of these goals at a time and, at the end of each quarter, they rank their performance on a scale of 0.0 to 1.0. Staff are expected to consistently achieve a score of 0.6 to 0.7. Anybody who is consistently achieving a 1.0 is asked to set more challenging targets.
But, for every rule there is an exception. Yahoo has stacked rankings, and has opted for formal quarterly reviews. A percentage of employees also have to be ranked under each rating. Far from being relics of the company’s past, both have been brought in since Marissa Mayer was appointed CEO in July 2012.