In most organizations, performance evaluations take the form of a regular process that recurs every year, documenting progress on goals and achievements. Traditional evaluation systems, meant as the analysis of an employee’s work, success and failures, at a fixed point in time, may hinder competitiveness, obstruct the natural work cycle, and cause more problems than they can actually solve. As a consequence, the entire idea of performance review is changing, and companies are re-designing and adapting new performance review paths.
What is changing?
A performance review is how companies provide feedback to their employees. Most common reviews are annual, but a year is a long time to remember all the thing you did, and people are often impatient to understand if they are on the right track or not. If organizations want to develop high performers, managers must be equipped to coach and empower them on a regular basis. Today’s employees want frequent feedback, open communication, and collaboration with their peers.
Companies like Buffer decided to skip the annual performance review. They find ongoing, weekly feedback to be the best path toward continuous improvement. They started this revolution with a one-to-ones meeting, where team leaders and teammates could get a confrontation every 2 weeks. This meetings, that usually lasted one hour, involve talking about challenges, achievements and every daily topic that may occur. It is the employee under the spotlight, not the manager or leader.
During these kinds of sessions, the only rule is to listen closely and ask questions, not trying to solve others’ problems, bu helping them figuring out their own solution.
Many companies are now trying to redefine the future of performance review and adapt it to their necessities.
At General Electric, managers used to meet employees once per year for fate-determining evaluations. But from 2015 General Electric has been guiding employees and coaching them on their path to meeting their goals under a much less rigid framework. The company is also rolling out an app for delivering more regular feedback.
In 2015, Adobe had already generated the statistics to prove that regular feedback and check-ins made sense. The company cut voluntary employee turnover by some 30% after introducing a frequent check-in program.
Pierre Nanterme, Accenture‘s CEO since 2011, started a revolution of performance management in 2015. He decided to eliminate rankings and annual performance reviews for its more than 300,000 employees, in order to create a more fluid system, in which employees can receive timely feedback from their managers on an ongoing basis following assignments. This change was huge because it was a recognition of a shift in work culture, and an evolving understanding of the role of management.
Also Deloitte has been working on a new renovated system, which imply a a review with 4 questions (2 of which has a ‘yes’, ‘no’ answer). After realizing the company was spending 2 million collective hours each year assigning numerical ratings to each employee, the company decided to finally change their perspectives.
What is going to happen?
These companies are all switching their focus from telling what employees should do at work into helping them to develop their skills as individuals. Companies spend a significant amount of time on evaluation, but still comparatively little on development.
It remains that human capital is every business’s greatest resource. The future of performance management will involve more feedback and give greater emphasis to development. And as employees become even better at their jobs, it’s a win-win situation for everyone.
Performance reviews are the annual way to provide feedback to employees. But in the future, they will disappear and be replaced in every company by other methods, and this will lead to a greater relationships among managers and employees. In order to get to that point, we’ll need to make employees working together, not competing with one another, towards achieving common goals. We may have a long way to go before performance reviews are totally gone, but changing the role today’s managers play in providing ongoing feedback and open communication shouldn’t wait any longer.