Now the big banks are starting to get rid of performance reviews

Gold Coast Mayor Tom Tate attends the Wanda Ridong Gold Coast Jewel immersive experience centre at the Hilton Hotel. Matt Roberts/Getty Images for Wanda Ridong

The NAB is following Deloitte in ending the dreaded performance review process for its 43,000 staff.

The bank would be the first of the big four switch to a more informal system from the old rigid annual reviews.

“In big companies you can build up complexities and processes which like Chinese whispers end up nothing like you really need,” CEO Andrew Thorburn said in an interview with the Australian Financial Review.

“Deloitte said they are really rethinking and I think we will do the same.”

Alec Bashinsky, head of people and performance at Deloitte in Australia, is running a global program to replace performance reviews with a four stage check-in process which doesn’t involve forms.

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.

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