Here's why Ernst & Young wants to keep performance reviews

Photo: Spencer Platt/ Getty Images.

Ernst & Young is fighting to keep bi-annual performance reviews between employees and managers in a move that defies current management trends.

While Deloitte, Accenture and National Australia Bank have all scrapped the formal performance review process, McGregor Dixon, head of human resources at EY, at the global consulting and accounting firm says the push to end reviews is an excuse to stop giving feedback to staff.

“While I love this new approach everyone is talking about, one of the risks is that it gives people an excuse not to have a discussion at all,” Dixon told the AFR.

“People are running away from ratings so fast they’re not appreciating what fills that gap,” he said.

Despite this, the latest research reveals that the performance review has lost its effectiveness as a tool to gather information about talent and is more of a tick-the-box exercise than a critical assessment.

The annual talks have in previous years, been labelled expensive, ineffective and not conducive to valuable conversation. Companies are starting to opt for more regular “check-ins” throughout the year, designed to give employees feedback from managers on an ongoing basis.

Earlier this year, Deloitte dumped bi-annual performance reviews in favour of weekly updates.

“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,” Alec Bashinsky, head of people and performance at Deloitte Australia, told Business Insider.

Bashinsky described performance management as an “old, outdated system” and that Millennials were welcoming the idea of receiving feedback on a regular basis.

“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,” he said.

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 Performance management is an old, outdated system.”

It is rumoured that PWC Australia is also considering a similar move later this year.

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