3 Things to Know Before Eliminating Performance Evaluations

performance evaluations

The HR scene has been up in arms recently as several large firms; including Deloitte, Accenture and GE have made the decision to eliminate their traditional performance evaluation processes. But before you go storming the gates of your CEO’s office with torches and pitchforks demanding that your organization follow in their footsteps, you may want to step back and consider a few things.

The biggest media splash around the topic came from Accenture, who will be eliminating their annual performance review and ranking process this September. According to the announcement and the subsequent press coverage, they cited empirical research that suggests a lack of clear value, an overwhelming amount of time and energy that’s expended supporting the process each year, and the plain and simple realization that their annual performance review process was failing to drive the performance they are looking for as an organization.

But, Accenture did not say that they are getting rid of the process altogether.  Accenture’s CEO Pierre Nanterme told the Washington Post in a recent interview that, “We’re going to get rid of probably 90 percent of what we did in the past”.

Rather than being a once-a-year process where people are force-ranked, the general sentiment seems to be moving away from structure and administrative burden to more frequent, real-time periodic feedback to let employees know where they stand on an ongoing basis.

And this, like GE’s new real-time performance development process, allows employees and their managers to clarify expectations, provide feedback, and set goals on an ongoing basis throughout the year.

Consider This Before Eliminating Performance Evaluations

I recently spoke with Philip Hendrickson, Chief Talent Strategist at Qwalify, about some of the more important considerations around employee evaluations. Collectively, we came up with the following three critical considerations every leader must know before eliminating performance evaluations in their organization:

1. Consider the importance of feedback. Your employees need feedback. They do. Performance evaluation processes are vital for a company. Done well, they reward certain behaviors and acknowledge business success. They also provide developmental guidance, ensuring that people feel they are growing and learning in their role.

Good programs make employees feel valued and retained. There is no better way to build a positive company culture than on a foundation of transparency and respectful acknowledgment of performance.

2. Know what will replace your current process. If your annual performance evaluation is tied to compensation and incentives, how will you make those decisions if you completely do away with your current process?

Professionals at all levels are used to a process that recognizes quality performance that rewards consistent behaviors. Whether you use formal performance evaluations or not, leaders must ensure that there is something else in place before eliminating their company’s current processes for rewards and recognition.

3. Make sure the new way is an improvement. Most companies view the annual performance process with cynicism. But most of the issues with typical performance processes are with the final ranking that individuals receive, not the evaluation itself. People feel that however hard they strived and pushed themselves during the year, they were still ranked as “meeting expectations.” It takes the wind out of them.

A lack of transparency is another cause of cynicism with many performance evaluations. It creates a feeling that there is some mysterious back room where the real decisions are made and some criteria not related to real performance that tips in favor of some people and not others.

Poor reviews, without clear communication of the process, literally chase employees out the door. Be very cautious how yours is structured and delivered.

How We Manage Performance

Our small firm currently has an annual performance evaluation process and we’ll probably stick with it.  Since our employees work with numerous supervisors on several project teams each year, it’s nice for folks to have a chance to get formal feedback from the Partners and Managing Directors at the end of the year. It’s not a very labor-intensive process and it ensures that people are getting feedback from everyone with whom they interact throughout the year.

That said, because people work on many different project teams over the course of a given year, we rely more heavily on the more frequent, specific feedback employees receive at the conclusion of each project. This feedback is delivered individually with the project lead as well as in a group during the after-action review process. Team members work together to identify the things that went well and those that didn’t go so well, in order to continually refine our processes.

Is There A Better Way?

While it may seem that there isn’t a single person walking the face of the earth who looks forward to annual performance evaluations, it doesn’t mean that performance feedback is not desired. Feedback is essential for driving behavior and success.

The talent marketplace has shifted and more employees have begun looking for other opportunities. When someone doesn’t feel their skills and experience are valued by their employer and they feel that they are not getting the level of feedback on their performance that they need to grow, they are much more likely to take a call from a recruiter.

So before you do away with your evaluation process for good, consider the needs of both your organization and your people. Be intentional about how you evolve your systems and processes to provide a winning formula for providing feedback on a more consistent basis.

This article originally appeared on Forbes.com

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Chris Cancialosi

Partner at gothamCulture
Chris Cancialosi is a recognized expert in the field of leadership and organizational development with particular focus on the leader’s role in shaping high-performing culture.
Chris effectively combines his operational field experience with his knowledge of organizational psychology to provide unique and practical solutions to today’s ever changing business landscape.
Chris Cancialosi

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