Year-end reviews are becoming a thing of the past. Here's why.
Samantha Carr | August 12, 2016
Ditching the rating system and reinventing performance management is a hot topic right now. Big organisations like GE Electric and Cargill have been leading the way, while others are struggling to catch up and work out what this means—and more importantly—decide if it’s the right move for their business.
Before deciding to do away with something, we should first consider why we have it in the first place and if the original rationale still applies. The traditional performance management approach involves annual objective-setting and mid/end-year reviews of those objectives by your line manager.
Then there's often a peer ranking or calibration of all employees. Good practice is to support this with more regular informal reviews, but this is often forgotten about, and people only really think about performance when they’re in a mad rush for end-of-year feedback (by which time no one can remember what anyone did). All in all, it’s a process that Deloitte found was costing them 2 million hours a year, most of which was senior managers’ time, having discussions about employees rather than with them.
At a basic level, performance management is about what it says on the tin—managing the performance of people to ultimately drive success for the organization. But is managing the performance of people still the best way to drive success?
Let me be candid: I’m not suggesting the premise is entirely wrong, but I do think the way it has evolved is not fit for the future. And there are three main reasons for that: