Why have some of the best companies killed the performance review?


We’ve all read about it. In 2012 Adobe started a revolution by removing its annual performance review process.

Others have followed: IBM, GE, Amazon, Accenture, Deloitte, Microsoft and many more. At a recent count, more than 30 of the US Fortune 500 companies have followed suit, not to mention many more not included in this group.

So, what have they done instead? What has replaced the traditional annual performance review? And should you be taking similar action?

From Review to Dialogue

In response to the need for a more flexible, encouraging performance management model, leading companies are moving from the periodic and highly structured performance review to a series of frequent and relatively free-form conversations. Adobe calls them “check-ins,” GE refers to them as “touchpoints” and Microsoft as “connects.” The main emphasis in all cases is the free flow of dialogue.

At Adobe’s, the annual cycle begins in January with what it calls a “rewards check-in.” Initiated by managers,  compensation increases are given to employees based on performance against goals. It’s also where employees are set up with new expectations for the year to come. Follow-up check-ins take place throughout the year on a weekly, fortnightly or monthly basis.  

For Deloitte, the time interval for check-ins can be the same – but no longer than monthly. Initiated by the employee, they last between 10 and 15 minutes. The emphasis is on strengths rather than shortcomings, and provides an opportunity for a manager to inquire about ways they can assist an employee build on strengths or fix issues. No results from the interaction are recorded centrally.  Nevertheless, Deloitte has reported positive results, and improved employee engagement that correlates with a higher frequency of check-ins.

GE’s approach shares many similarities. However, their program also features “insights.” These can be initiated at any time by  employees and  their bosses and are designed to address a specific topic. For example, the focus might be on how someone participated in a conference, or how a conversation was carried out.

Deloitte has it’s own twist on the performance review replacement: the “performance snapshot.” This requires a team leader to provide answers to four questions on a quarterly basis to team members. The questions, which are based around an  individual’s performance and readiness for advancement are converted into  data and used to make  promotion,reward and remuneration decisions.

Another feature of the new approach to performance management is the pulse survey, conducted for all employees. Adobe and Deloitte conduct theirs every quarter.  It involves its global workforce completing ratings on 10 to 15 questions, with each question providing the opportunity for a more detailed response.

Driving Your Business to a Bright Future

Each of these companies has concluded that the old lock-step, backward-looking performance review system was driving  their business in the wrong direction. The traditional once-a-year model was not synchronous with the ever-changing and highly unpredictable nature of their industries. And  the return on investment of the time and effort expended was simply no longer  there.

Is it time to ask the same questions of your company? Is it time you reviewed your reviews?

Graham Kenny conducts public workshops in strategic planning and performance measurement with KMS Education.

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9 Comments On "Why have some of the best companies killed the performance review?"

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Louise Creaser

Great article Graham. What are those four questions they’re asking at Deloitte?

Colin Imms
I keep reading comments like “return on investment of the time and effort expended was simply no longer there” referring to performance reviews. Sorry, I don’t see how the time taken to undergo these very regular check-ins or whatever you might wish to call them would be any less than that taken with our current review system. Yes, I’m old school, and prefer the old school way which to me still does what it needs to do. A formal annual review, coupled with 1-2 other informal reviews through the year and individual discussions with through the year as may be… Read more »
Tim Baker

Hi Colin

If performance reviews don’t have any impact of improving performance, why do them? There is no research I have come across anywhere that shows that PR improve performance.

BTW, I’m the person who wrote the article on replacing the job description with a role description. Role descriptions shift the focus from the job to performance, taking into account the non-job dimensions of performance.

Mark Shaw
Whether it is called a performance reviews, check in conversations or something else, we still need to undersatnd that Girard’s 4 questions still need to (a) be communicated in a meaningful way and (b) be justified. In other words performance is and will always be measured. To me, the key question is how. My research agrees with Tim’s in that performance reviews as we know them do not improve performance so killing that process makes some sense. But what will we replace it with? more regualr conversations are great but not enough. For almost 20 years I have successfully advocated… Read more »
Michael Minns
Based on my research and, at the time, 17 years experience as an evidence based HRM Consultant I came to the conclusion in the year 2000 that Performance Appraisals have never worked and never will and further the only tangible outcome is that they achieve is to de-skill managers. So I formed ‘The Australian Society for the Abolition of Performance Appraisals’ with the purpose (as against the Mission, Vision, Values crap) “To allow Managers to do the job that they are paid to do;”TO MANAGERS AND LEAD PEOPLE” There are two levels of membership of the Society #1 Practitioners; non… Read more »
More on HRM

Why have some of the best companies killed the performance review?


We’ve all read about it. In 2012 Adobe started a revolution by removing its annual performance review process.

Others have followed: IBM, GE, Amazon, Accenture, Deloitte, Microsoft and many more. At a recent count, more than 30 of the US Fortune 500 companies have followed suit, not to mention many more not included in this group.

So, what have they done instead? What has replaced the traditional annual performance review? And should you be taking similar action?

From Review to Dialogue

In response to the need for a more flexible, encouraging performance management model, leading companies are moving from the periodic and highly structured performance review to a series of frequent and relatively free-form conversations. Adobe calls them “check-ins,” GE refers to them as “touchpoints” and Microsoft as “connects.” The main emphasis in all cases is the free flow of dialogue.

At Adobe’s, the annual cycle begins in January with what it calls a “rewards check-in.” Initiated by managers,  compensation increases are given to employees based on performance against goals. It’s also where employees are set up with new expectations for the year to come. Follow-up check-ins take place throughout the year on a weekly, fortnightly or monthly basis.  

For Deloitte, the time interval for check-ins can be the same – but no longer than monthly. Initiated by the employee, they last between 10 and 15 minutes. The emphasis is on strengths rather than shortcomings, and provides an opportunity for a manager to inquire about ways they can assist an employee build on strengths or fix issues. No results from the interaction are recorded centrally.  Nevertheless, Deloitte has reported positive results, and improved employee engagement that correlates with a higher frequency of check-ins.

GE’s approach shares many similarities. However, their program also features “insights.” These can be initiated at any time by  employees and  their bosses and are designed to address a specific topic. For example, the focus might be on how someone participated in a conference, or how a conversation was carried out.

Deloitte has it’s own twist on the performance review replacement: the “performance snapshot.” This requires a team leader to provide answers to four questions on a quarterly basis to team members. The questions, which are based around an  individual’s performance and readiness for advancement are converted into  data and used to make  promotion,reward and remuneration decisions.

Another feature of the new approach to performance management is the pulse survey, conducted for all employees. Adobe and Deloitte conduct theirs every quarter.  It involves its global workforce completing ratings on 10 to 15 questions, with each question providing the opportunity for a more detailed response.

Driving Your Business to a Bright Future

Each of these companies has concluded that the old lock-step, backward-looking performance review system was driving  their business in the wrong direction. The traditional once-a-year model was not synchronous with the ever-changing and highly unpredictable nature of their industries. And  the return on investment of the time and effort expended was simply no longer  there.

Is it time to ask the same questions of your company? Is it time you reviewed your reviews?

Graham Kenny conducts public workshops in strategic planning and performance measurement with KMS Education.

Leave a reply

9 Comments On "Why have some of the best companies killed the performance review?"

avatar
  Subscribe to receive comments  
Notify me of
Louise Creaser

Great article Graham. What are those four questions they’re asking at Deloitte?

Colin Imms
I keep reading comments like “return on investment of the time and effort expended was simply no longer there” referring to performance reviews. Sorry, I don’t see how the time taken to undergo these very regular check-ins or whatever you might wish to call them would be any less than that taken with our current review system. Yes, I’m old school, and prefer the old school way which to me still does what it needs to do. A formal annual review, coupled with 1-2 other informal reviews through the year and individual discussions with through the year as may be… Read more »
Tim Baker

Hi Colin

If performance reviews don’t have any impact of improving performance, why do them? There is no research I have come across anywhere that shows that PR improve performance.

BTW, I’m the person who wrote the article on replacing the job description with a role description. Role descriptions shift the focus from the job to performance, taking into account the non-job dimensions of performance.

Mark Shaw
Whether it is called a performance reviews, check in conversations or something else, we still need to undersatnd that Girard’s 4 questions still need to (a) be communicated in a meaningful way and (b) be justified. In other words performance is and will always be measured. To me, the key question is how. My research agrees with Tim’s in that performance reviews as we know them do not improve performance so killing that process makes some sense. But what will we replace it with? more regualr conversations are great but not enough. For almost 20 years I have successfully advocated… Read more »
Michael Minns
Based on my research and, at the time, 17 years experience as an evidence based HRM Consultant I came to the conclusion in the year 2000 that Performance Appraisals have never worked and never will and further the only tangible outcome is that they achieve is to de-skill managers. So I formed ‘The Australian Society for the Abolition of Performance Appraisals’ with the purpose (as against the Mission, Vision, Values crap) “To allow Managers to do the job that they are paid to do;”TO MANAGERS AND LEAD PEOPLE” There are two levels of membership of the Society #1 Practitioners; non… Read more »
More on HRM