I was interested to read yesterday that consulting firm Deloitte has decided to scrap its bi-annual staff performance review in Australia in favour of real-time assessments. This is all part of a global initiative at Deloitte to reinvent its performance management system.
Deloitte Australia’s head of people and performance Alec Bashinsky told SmartCompany that the traditional staff performance review regimen is time-consuming (2 million hours a year collectively according to the Deloitte study!) and costly: ‘The process is cumbersome, there are lots of forms to fill out, it lacks transparency and focuses on the negative for the employee’.
Having been subject to various performance management systems in my career, I am of the same opinion. A formal performance review process is often used by managers to justify not having an ongoing performance dialogue with a staff member. It is my view that performance management is best achieved through an informal process of close consultation and regular feedback, not via some bureaucratic ‘box ticking’ exercise at set junctures during the year.
On top of that, formal reviews are often highly subjective; apply a banal scoring system; have little regard for the wider circumstances (‘the system’) in which the individual must work; they pit people competitively against one another to the detriment of organisational cohesion; and they are demotivating because of their tendency to pick fault.
That is not to mention the negative connotations of the oft-used term: ‘performance managed‘ – ‘he/she is being performance managed’ indicates that the person is under scrutiny for poor performance.
But perhaps my biggest criticism is the inherent assumption in performance management systems that the person doing the ‘reviewing’ is such a quality performer and so beyond reproach that he/she has the right and the credibility to make judgements about the performance of the ‘reviewee’. As we all know, this is often not the case. How many times have you been reviewed by a person who you consider to be a poor performer? In most performance management systems, there is little recourse if you are on the receiving end of such a negative report.
I’m sure that many of my old Army colleagues would agree with me, having received an unflattering report from a less-than-capable superior (up to the rank of Major in the Army, an individual’s promotion is based on time-in-rank, which means that one’s superior may not be General material) .
You may have noted the quote by W.Edwards Deming on the home page of this website – Deming is one of the most strident critics of the individual performance review, citing it as one of the ‘seven deadly diseases of Western management’. I’ve recently been studying his work in my MBA course. He put it quite nicely when he said:
Evaluation of performance, merit rating, or annual review… The idea of a merit rating is alluring. The sound of the words captivates the imagination: pay for what you get; get what you pay for; motivate people to do their best, for their own good. The effect is exactly the opposite of what the words promise.
I wouldn’t be at all fussed if the annual staff performance review were to go the way of the dinosaur.