Annual Performance Reviews Scrapped: A Positive or Negative Move?

A recent article in the Independent: ‘Accenture: One of world’s biggest companies to scrap annual performance reviews

Apparently this decision has been based on the realisation that trying to measure the value of employees’ contribution and ranking them is in fact costly, an administrative burden and most of all not effective in improving the performance of employees. Many top companies have moved away from performance reviews to take up a model of supporting and positioning employees to perform better.

It is surprising that more companies have not moved away from this model of performance review that evaluates one employee’s performance against another, whether those employees are administrators, trainers, sales people or management. Does this model really motivate employees to perform better or develop an organisational culture of employee support and value? But, should annual performance reviews be scrapped altogether? In my experience employees’ value performance reviews when they are seen as an opportunity to spend quality time participating in discussions about not only performance, but their perspective on their role, progression and the company they work for. On-going feedback on performance and support, and obtaining the employee’s perspective on performance is very valuable, but there needs to be some sort of formalised process to evaluate progress. The review/appraisal is about getting the best from employees by evaluating performance against personalised objectives that are based on overarching business objectives, and an individual’s aspirations. It’s understandable that in some sectors competition to achieve the best outcomes against KPIs is an effective motivational strategy that is expected and welcomed, as in sales roles. However, there is more to the value of an employee than meeting targets.

In the last year there has been a large bodyAppraisal of evidence published saying how much employees value professional development. Employees are more likely to stay loyal to a company if they are offered training and opportunities for career development. The Temkin Group’s Employee Engagement Benchmark, 2015 found that engaged employees demonstrate a higher commitment to their work, take less sick days and are less likely to look for a new job. Training, coaching and feedback are one of five competencies they cite for employee engagement.

Employee professional development cannot just be offered on a whim or an informal request, it should be based on a structured process to ensure that agreed development is in line with budget allocations and organisational objectives, as well as personal aspirations.

The Accenture CEO said that employees should be given the “freedom, the authority, the delegation to innovate and to lead with some very simple measures”, which sounds very empowering, but hopefully won’t be at the expense of performance and aspirational discussions between the employee and manager.

Author: Carolyn Lewis, Managing Director of Elearning Marketplace Ltd and learning technology consultant.


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