Deloitte reinventing performance management PDF

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Title: Reinventing Performance Management HOW ONE COMPANY IS RETHINKING PEER FEEDBACK AND THE ANNUAL REVIEW, AND TRYING TO DESIGN A SYSTEM TO FUEL IMPROVEMENT

Academic Citation: Buckingham, M. and Goodall, A. (2015) “Reinventing Performance Management”. Harvard Business Review, April, 40-50.

Summary of Article:   

Deloitte decided to forgo traditional review systems as they were too resource intensive and only provided superficial info on workers Replaced it with a system that interviewed managers to obtain their thoughts on what they would do with an individual worker rather than how they feel about them Address 3 main factors o Allow for workers to have clear recognition, can identify good performance and develop methods to further good performance

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Main Headings and Points Made: The Need for Change 

The old system at Deloitte was very time and resource intensive – 2 million man hours taken o Employees were set objectives at the beginning of the year, reviewed against them after the end of each project  End of the year employees receive a rating which was come to by counselors after meeting and discussing their rating o Whilst employees found this beneficial due to its predictive and simple nature – did not accurately reflect real world and there was a concern that the ratings and assessments generated were too superficial

Science of Ratings 

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Assessing someone’s skills produces mostly inconsistent and inaccurate data o Rather than providing information on their skills – produces info on the rater instead  What is really being measured is the rating tendencies of the rater – idiosyncratic rater effects Best teams are those that are orientated around their strengths and feel they are doing their best work every day

Radical Redesign 

Three main objectives for new system

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o Allow clear recognition for performance o Be able to see performance o Fuel performance to continue To recognize and see performance need to streamline process and remove idiosyncratic rater effects o Rather than use 360 degree measures or ratings, ask team leader about ‘their own future actions with respect to that person. Ask team leaders to respond to four future-focused statements about each team member’ o People are highly consistent when rating their own feelings and intentions o Ask team leaders 4 questions about their staff  1. Given what I know of this person’s performance, and if it were my money, I would award this person the highest possible compensation increase and bonus [measures overall performance and unique value to the organization on a five-point scale from “strongly agree” to “strongly disagree”].  2. Given what I know of this person’s performance, I would always want him or her on my team [measures ability to work well with others on the same five-point scale].  3. This person is at risk for low performance [identifies problems that might harm the customer or the team on a yes or-no basis].  4. This person is ready for promotion today [measures potential on a yesor-no basis]. o Aim is to discern what leaders would do with an individual rather than what they think of an individual  Use data to review employees and what actions would be best to further develop the individuals

Third Objective 

If performance can be accurately measured and recognized – what is the best way to further fuel and develop that performance o Research shows that regular check ins with workers works best o Allows managers to set expectations for the upcoming week, review priorities, comment on recent work, and provide course correction, coaching, or important new information. The conversations provide clarity regarding what is expected of each team member and why, what great work looks like, and how each can do his or her best work in the upcoming days—in other words, exactly the trinity of purpose, expectations, and strengths that characterizes our best teams o Weekly check ins were determined to be most effective  Worked best when employee was checking in with manager and not the reverse  Technology and experience needs to be designed in such a way that the worker feels like sharing with their manager – use social media as an example of sharing experience technology

A Note about Transparency 

Workers often want transparency – they want to know what their scores are, who receives them and what is being done with them

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It is better for workers if their scores are not shared with them – when they are shared scores end up being skewed – end up higher to avoid offence

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