HR Management & Compliance

Have Performance Reviews Outlived Their Usefulness?

Yesterday we began to explore the state of performance reviews with Lisa Bodell of futurethink. Today we’ll look at what some major companies have done with their performance reviews.

By Lisa Bodell, futurethink

Ahead of IBM, other organizations have bravely taken a moment to reevaluate performance evaluations. Last August, GE reported its decision to scrap formal, annual reviews for all 305,000 employees, replacing those evaluations with “touchpoint” discussions between managers and employees about goal progress. Instead of performance scores or rankings, it introduced PD@GE, an app to help employees, managers, and teammates share feedback for continuous improvement.

Accenture, a professional services company, also did away with performance reviews in 2015. Instead of relegating feedback to a once-a-year exercise, managers now provide employees with feedback on assignments as needed throughout the year. By coaching staff in real-time—instead of trying to recall mistakes or successes from 10 months ago—these check-ins enable managers to identify and resolve performance issues in a timely manner. And by removing the anxiety and formality associated with annual reviews, the feedback itself can become less threatening and more supportive to employees.

Regular input provides employees with a sense that the organization is investing in their personal development, which keeps them more engaged and often, more productive. Ideally, the feedback should be linked to organizational strategy so employees understand how their individual performance impacts the business from a strategic viewpoint. Employees who have a clear idea of what they need to do to improve and advance in their careers are also less inclined to seek employment opportunities elsewhere.

Whether or not your organization is prepared to simplify its employee evaluation process, the evolution is already in progress. Stacked ranking systems and time-sucking forms will soon go the way of fax machines and pagers. In their place will be a simpler system of frequent feedback and productive dialogue that is supported by technology instead of dictated solely by algorithms.