Growing parade of HR heads ‘blow up’ performance reviews

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They were the mode of reviewing employee performance “before we put a man on the moon”, CEO Chris Cabrera of US software firm Xactly has said.

But all indications are they are now on their way out.

Last week, we reported General Electric was doing away with performance reviews and employee rankings, in a move considered a market bellwether. 

However, the San Jose Mercury News reports the momentum is taking hold across global HR, and if you are not scrapping them yet, you may well be behind.

Deloitte research has shown in a survey of 3000 companies in 100 countries that only 10% now feel that performance reviews are an effective use of time.

San Jose Mercury News reports that 50% said they were of no use at all.

The result is that many companies are choosing to scrap performance reviews. More than half the companies Deloitte surveyed are either currently redesigning their system, or are planning to overhaul it within the next 18 months.

The San Jose Mercury News reports that at a conference in Miami earlier this year a ‘conga line’ of managers got up to declare they were scrapping the reviews.

“The conference session on blowing up the traditional performance review was standing room only,” US-based TINYpulse CEO David Niu told the paper.

"One speaker after another got up and said 'We blew it up at our company' or 'We got rid of it at ours,' and the crowd was cheering because nobody likes performance reviews; people have started to re-imagine the whole process."

Xactly CEO Chris Cabrera told the paper his own company had stopped annual reviews, and was building a business that was helping others do the same.

“So many employers are still using an annual-review process that was popular before we put a man on the moon, but they're now such an old-school way of thinking. As a manager, I hated doing them,” he told San Jose Mercury News.

Companies are moving fast towards more frequent feedback models utilizing new workplace technology, and focusing more on strengths than weaknesses.
  • A. Scida on 2015-09-01 10:39:37 AM

    The key is and will always be feedback that is timely, relevant and done with care. And yes, builds on areas of strength while working towards improving overall performance that matters.

  • Sue on 2015-09-01 1:14:38 PM

    Finally, this process is both labour and technology intensive and rarely helped the manager or the employee. In the case of my employer it was tied to a percentage who could receive an above average, median average and of course someone had to be at the bottom 5% also - not really a performance tool after all - just a salary management tool in the end.

  • Pauline Blais on 2015-09-01 1:57:08 PM

    While no system is perfect, or easy and lots of managers do not feel comfortable conducting performance reviews......I think there is still some value in having meaningful conversations about one's contributions to the organization and one's ongoing need for professional development aligned with the organization's goads. Written template can be a blank piece of paper or very sophisticated tool. The source of discomfort is often due to the inexperience with or lack of ability in conducting meaningful and difficult conversations, whether they are about positive or negative feedback. This has not changed since we put a human being on the what! Let's be gutsy and confront the real issues.

  • Helen on 2015-09-01 3:37:20 PM

    I have always questioned the purpose of annual reviews. Manager/supervisors should be constantly providing feedback be it positive/negative throughout the year. Praise should be provided as it occurs not months later. Also issues should be dealt with as they arise too.
    I applaud those companies who have decided to end the process.

  • Lisa on 2015-09-01 6:39:13 PM

    are they referring to yearly reviews or in general. As an HR professional of over 17 yrs experience, I can honestly say this is a foolish move if your doing more than just annual reviews. I do think that firms need to start doing quarterly reviews in order to continue to help motivate, grow and ensure that the employee is on the "right path". When your doing a quarterly review your able to see the progress of the employee and when you do nothing your not able to properly gauge this. IF the employee is not aware they are doing something wrong, how can a firm expect to discipline them or correct them for that matter. My question, how are employers gauge their employees and ensure that the newer employees are feeling they are being supported, trained and focused if the employer has no idea what they are doing? So I am happy to hear at least some firms are doing the feedback models....again how is this being done and what is the success rating?

  • Rochelle Massarella on 2015-09-05 10:35:07 PM

    I have always felt that performance reviews are ineffective. My feeling is that if a manager is doing his or her job - developing employees strenghts e.g. giving feedback on an on going basis regarding employees strengths and expectation, there was no need for a annual review. There should be no surprises which is oftentimes the case in an annual review. As an HR Director, I was expected to design and support annual reviews against my better judgment. I did find them useful for setting and measuring long-term goals, and for documentation in the event of litigation. I am glad corporate American has finally come it its senses and managers who develop their employees will shine.

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