Much ado about nothing

Deloitte, Adobe, Accenture. They're all doing it; dumping the performance review.

Not only is the annual performance review costly in terms of time, resources and funds, but it actually yields unreliable, and meaningless data. Management research firm CEB found that the average manager spends more than 200 hours a year on performance reviews. This, plus the cost of the performance-management technology itself, means that a company of about 10,000 employees spends roughly US$35 million (AU$47 million) a year to conduct reviews. An expensive investment for a very lacklustre result.

Detested by managers and employees alike, the performance review is heavily skewed by the level of management competency, skill and bias, together with an employee’s ability to sell themselves. They are seen as a threat, mainly because performance reviews are perceived as being tied to salary reviews and therefore trigger the fight, flight and freeze part of our primal brain. Hackles are up. Engagement down. Open, honest conversation is mute and a constructive, meaningful outcome for either party doubtful. Thus a static culture of feedback avoidance prospers, in which no-one learns, and the organisation treads water.

Alec Bashinsky, head of People and Performance at Deloitte in Australia, likens performance reviews to drive-by shootings; you just never know when you’re going to get hit. They are a feared, flawed and futile strategy that fails at monitoring and leveraging talent.

If it’s broken, fix it

What these global giants are finding far more productive, are frequent career conversations. At Deloitte, this means recognising, seeing and fuelling performance. Conversations are held right after a certain project, instead of at the end of the fiscal year. They are timely, and involve contextual exchanges; yielding real time feedback for both the manager and their employee.

Customised, quarterly performance snapshots with little bureaucracy also take place at Delloitte. These snapshots coach employees and equip them with the skills required to improve. Rankings have been replaced with the recognition that behaviour is the result of the individual and the situation, thus rendering peer comparisons across offices and continents pointless. In addition, employees and managers come together for 10-minute check-ins—either weekly or monthly—in which all are encouraged to seek and give feedback. The emphasis is on learning, not correction; two-way, not one-way communication; and the solution not the problem.

Ask the 4 basic questions

Your quarterly performance snapshot need be no more complicated that asking 4 basic questions:

  1. Are you doing your job?
  2. Are you supporting your team?
  3. Are you dealing effectively with the customer?
  4. Are you engaged?

Career conversations are all about performance partnering. They are about embracing feedback and engaging in real conversations, and are designed to foster a nimble, responsive and highly productive work environment. Research shows that people want regular and constructive feedback. Indeed, Millennials often demand it. They want to be their own bosses at work, and if they do have a boss, they want their bosses to serve as a coach or a mentor.

Not surprisingly, Deloitte have found that the more career conversations are happening, the greater the employee engagement.

The tide is turning. Performance reviews are out and career conversations are in.