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This is why Deloitte is banning performance reviews

Cameron Spencer/Getty Images

Alec Bashinsky, head of people and performance at Deloitte in Australia, likens performance reviews to drive-by shootings — you just never know when you’re going to get hit.

He’s running a global program to get rid of the feared meetings between Deloitte managers and employees globally.

Last month he started with 1500 of 6000 Australian staff. Over the next six months, the rest of the local team won’t have to face a performance review again. In the US, 10,000 staff have stopped reviews.

It’s part of a global movement gathering support to end reviews. According to the latest research, the performance review, which in many companies is more a tick-the-box exercise than a critical assessment, has lost its effectiveness as a tool to gather information about talent.

What usually happens is that supervisors are concerned about demotivating staff by providing appraisal ratings that are accurate, yet low. So they tend to give high ratings, regardless of performance.

And from the point of view of employees, the whole process can be demotivating.

“The old system used to be compared to a drive-by shooting, with not being sure what the managers want, not being clear around the objectives and then waiting six months to know whether you have or haven’t performed,” Bashinsky told Business Insider.

A better system could be a more informal, continuous appraisal and performance feedback.

That’s what Deloitte is doing, giving ongoing feedback and coaching designed to promote continuous employee development and engagement, starting with a ten minute check-in either weekly or monthly

“The feedback we’re getting already from our employees is that they are ecstatic around this process,” Bashinsky says. “The other good thing, particularly for Millennials, is that they really want the feedback on a regular basis.”

The 10-minute catch up is driven by the employee along the lines of: I’ve just finished a job, can we have a quick chat about that?

“Along the journey, if they haven’t performed, that might be a separate conversation,” Bashinsky says. “The percentages that I use is that 97% of our employees are good. The old performance management system has a negative connotation. It’s really set up for the 2% to 3% who aren’t performing yet we put everyone through the same mix up.

“In my view, all organisations need to look at how they develop and lead talent. Performance management is an old, outdated system.”

Deloitte, when it looked at at the process of performance reviews, found that millions of hours were being wasted, representing a lot of money.

“If you ask any employee about performance reviews they immediately go into the negative and shrug their shoulders,” he says.

The new Deloitte framework is based around: a check-in periodically; a quarterly pulse survey of 10 questions the manager sends out to the team to get feedback; a performance snapshot every three months done by the manager via a four questions survey online about each employee; and then quarterly talent reviews.

“There’s no forms … but we’re running regular conversations between the manager and the employee,” he says.

“And we’ve found the more the check-ins, the greater the employee engagement.”

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