Is This The End of Annual Performance Reviews?

images-52With the news that Accenture are to end the their annual performance review process, which was used to rank over 300,000 staff, is this the start of the end for this type of company-wide assessment?

Having worked for large corporations for the majority of my career I was involved in these processes which often took 3 to 4 months to perform, and to be honest I always questioned the value that they bring.

It’s not that I question the need for performance assessments, it’s just that for the amount of effort that went into the process, the accuracy of the assessment and the dissatisfaction that it created, both in the people being assessed but also in the assessors, there seemed to be very little real return on investment.

In the last two companies I worked for it involved the forced ranking of all staff above a certain management level, comparing them against one another.

Which, to be honest, sounds like a great idea, but one of the challenges came when we started to compare people who worked for different managers.

Now we had people trying to assess people whom they had little to no contact with, often making an assessment on a full years employment based on maybe one meeting or one presentation.  In sport we don’t just a player on the evidence of one game, we try and judge them across entire seasons, which to me is the only way to accurately assess people.

I have lost count of the number of times I have had to defend one of my star performers assessments because one other senior manager asked them to do something and they said it wasn’t possible because they were slammed with work, and because of that they were accused of not being a team player, not committed to the good of the company, or going the extra mile and should be downgraded.

The assessments always seemed more subjective than objective, which then undermined their value.

It felt at time like it was an unnecessary evil, but they did actually serve a purpose, and one that needed to be filled.

The output of the process was used to determine who got what pay raises, which staff would go into leadership trainings and assessments, and it allowed for us to identify who were the potential stars was in the organisation and provided a short list of our top candidates who should be considered for promotions and advancement.

The challenges were the accuracy, the subjectiveness of it and the sheer amount of effort that was involved in performing the process. As Accenture themselves said “The process is too heavy, too costly for the outcome, and the outcome is not great.”

I always felt that if we could streamline the process and make it more objective, then it would be a great tool, but no one seemed to want to take that task on, probably because they felt it was impossible.

I always think of the line from Churchill “Democracy is the worst form of government, except for all those other forms that have been tried from time to time.”  And it’s also true of annual performance assessments, they are bad, but they were actually better than anything that had been performed previously.

The question is what can we replace them with?

Within my own department we had objective performance reports for all teams within the department, which made it very easy to rank people in terms of results, but in that situation everyone was doing similar work, so the comparison was fair.

But how do you compare designers, with sales staff, with customer service staff, etc., etc., where often it can be difficult to put metrics in place, and even when you have metrics when people achieve the same results it still comes down to a subjective assessment of people doing different work, often work which has a different value for the company.

It will be interesting to see if this becomes a trend, and if so what will replace it.

I’d be interested hear from you if you are thinking of replacing your aciculate assessments and to know what tools you are going to use to replace them?

 

For FAST Results either email me at gordon@leadership-principles.com or call me on +1 561 501 0888 to arrange a free strategy call.

 

 

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