The shift in the performance management paradigm has just begun as global giants including Adobe, Accenture, General Electric and the like eliminated their conventional performance ranking methods and annual employee review programs.
Did you know? It is highly likely that around 50% of the Fortune 500 companies will revamp their performance management strategies in 2016, with 10% already leading the change.
Let’s take a look at the compiled summary of the altered performance management process of five industry leaders of the world:
By ending their ‘Annual Performance Appraisals’ in 2012, Adobe initiated the tectonic shift in the performance management process and became harbingers of the change.
Adobe replaced its ‘Annual Performance Appraisals’ with ‘Regular Check-ins’ followed by ‘Frequent Feedback’ program. Today, Adobe follows NO RANKING/RATING policy and allows different organizational wings to determine the frequency of ‘Check-In’ conversations as per the work cycles.
The result is increased employee engagement with voluntary turnover reducing by 30% since the introduction of ‘Check-in’ methods. Check-in and regular Feedback methods have helped Adobe connect with their employees and make them feel valued, which, on the other hand, has resulted in an engaged, goal-oriented, performance-driven workforce.
Deloitte in 2015 announced the abolishment of ‘Once-a-Year’ Performance Review, 360 Degree Feedback and Objective Cascading methods from their HR policies. These abolishments were ordered when company analyzed its performance review process and total time consumed in the same. As per their calculation, time consumed in these processes was 2 million hours per year across their organization.
Deloitte’s new process allows every team leader to perform ‘Check-In’ with each team member per week and discuss ongoing tasks/priorities, comment on their recent work and provide training for skill enhancement. In order to perform ‘Check-Ins’ frequently, Deloitte allows team members to initiate the process rather than the team leaders.
These weekly Check-ins are followed by Quarterly Team Review where team leaders have to respond to four future-focused question about their team member. This process has replaced the traditional team review the terms of ‘what you think of the team member’ with ‘what would you like to do with the team member’. Regular check-ins initiate communication and feedback allow managers to connect with their employee consistently. The result is engaging team members, focused workforce and valued employees.
3. General Electric (GE)
General Electric abolished their decade old ‘Rank and Yank’ system for employee appraisal and yearly rating. As per their ‘Rank and Yank’ model, GE appraised and rated their employees once a year, out of which bottom 10% were fired – not exactly a recipe for Employee Engagement.
In the year 2015, GE replaced their ‘Rank and Yank’ policy with Frequent Feedback and Regular Conversation, named ‘Touchpoint’ for employee progress review, supported by an Online Mobile App. The performance review app of GE enables employees to capture progress against their goals and also enables them to provide and request for a peer-to-peer feedback. Managers still perform an annual work review based on the regular feedback and ‘Touchpoint’ data, rather than the former annual performance review.
With the revamped performance management and employee review policy, GE has now enabled their employee with transparency, regular feedback, realistic goals and more value. With their mobile app, GE allows each and every employee to shape up their performance and engage with the peers. It also enables managers to perform a data-driven, real-time performance review of their team members.
Following the footsteps, Accenture became few early adopters to dissolve their Annual Employee Ranking and Evaluation system. Company abolished traditional employee review model back in 2015 and updated its system with new policies.
Similar to General Electric, Accenture too incorporated frequent feedback and conversations as the heart of their new performance review process. The focus has now shifted from performance rating to performance development.
As Ellyn Shook, CHRO, Accenture, put it “Rather than taking a retrospective view, our people will engage in future-focused conversations about their aspirations, leading to actions to help them grow and progress their careers.”
By shifting their focus to performance development, Accenture is working towards creating a highly engaged workforce that is driven and more focused towards organizational goals. Policies such as regular feedback and conversation with the leaders have been defined to abolish invisible walls and develop a more open, engaged work culture within the firm.
Like Adobe, Cargill – leading food producer and distributor in the US, began transforming its conventional performance management process in 2012 by introducing ‘Everyday Performance Management’ technique. This new technique removed annual performance reviews with more frequent on-job conversations and resulted in a regular, constructive feedback.
The new ‘Everyday Performance Management’ followed following touch-points:
- Regular reward and recognition for managers who established a good day-to-day performance management practices within the system.
- Learning and sharing the tips/experiences of the successful managers.
- Teams were held responsible for the regular practice of day-to-day performance management.
- Skill training were provided for the success of Everyday Performance Management program which also included regular feedback and work analysis.
The outcome of the ‘Everyday Performance Management’ has been impressive for Cargill. Around 70% of the employees now feel more valued and engaged with their managers with ongoing performance discussions.
If we look at the ongoing shift in performance management process and compare it with what these 5 organizations are implementing, we can have a clear picture of the emerging trends that are going to shape the future of employee review and performance management in 2016.
6 Performance Management Trends to Watch Out this Year
- Regular One-to-One performance Conversations or ‘Check-In’ model.
- Peer and Manager’s In-moment Feedback Policy.
- Near-term Objective than the Annual Objectives and regular Update over Goal fulfillment.
- Performance reviews highly focused on development and skill training and less over the regular employee assessment.
- NO to Performance Rating.
- Performance Evaluation Process supported by Online Mobile Apps.
Employers have started to realize that performance management as a business function has the potential to increase overall organizational productivity and can also help them gain a competitive edge in the market. Hence, abolishing outdated, traditional methods of performance management protocol and embracing new management process is going to be the prime focus for top employers in 2016.
An employee-focused performance management technique has the power to accelerate the entire employee engagement process at once. Today, organizations must aim to support their employees, help them develop new skills and align them with their business goal to outshine in fierce market competition.