You may have seen the recent announcement that Accenture is eliminating its annual evaluation process. The company which employees over 300,000 people globally has said it will implement a more fluid system in which employees receive timely feedback on an on-going basis. During the past couple of years several other large firms including Deloitte, Adobe and Microsoft have announced changes to their performance review processes. Although these firms are still a small minority, a study by the Corporate Executive Board indicated that over 95% of managers were dissatisfied with their companies review process.
Although there may be many objectives for having a review process, ultimately the key goal is to provide performance feedback to employees and drive a higher level of individual and organizational performance. I believe many companies often struggle with achieving a return on the time commitment required for their review process and the desired results. Many companies often have processes that become more of an exercise in completing the process instead of focusing on the objective of performance improvement.
After seeing some of these large companies announce these changes, many leaders may be asking themselves if annual performance reviews are really necessary for their company. In my view, leaders need to recognize that although these companies are either eliminating or changing their process, they are not trying to stop providing feedback to employees. It is unclear exactly how Accenture’s new process will work, it appears to be focus on increasing and improving the delivery of performance feedback.
Due to the annual timing cycle many review process inherently causes feedback to be delivered at the wrong time. Although the processes suggest for leaders to have on-going performance meetings, my experience is that this is one of the least enforced part of the appraisal process. If an employee receives feedback on their work or project several months after it has occurred, there is large gap during which both the individual and companies performance could have been improved.
Instead of just following these companies and possibly eliminating annual reviews, leaders should be asking themselves the following questions:
Does our review process help to improve individual and organizational performance?
Are we seeing an appropriate benefit from the time commitment for the process?
In my company, what is the most effective way to provide useful and timely feedback to employees?
What additional steps will the company take to help employees improve their performance?
Reflection on these questions can assist leaders in starting to determine whether their current review process is working for them and whether they need to make changes to improve its effectiveness.