This fall, one of the biggest companies in the world will terminate a practice that almost every employee dreads each year: the Annual Performance Review.
Accenture CEO Pierre Nanterme says they have been quietly preparing for this “massive revolution” in its internal operations. It’s a big deal because his company, along with thousands of others, has been doing work this way forever.
Accenture, which employs 330,000 people worldwide, has discovered through their own research (as well as studies from outside sources) that sitting down with a team member once a year to “tell them what you think of them” misses the mark. Interestingly, Accenture isn’t the only organization to draw this conclusion. Over the last few years, a similar decision was made by:
- The Gap
According to Washington Post journalist Lillian Cunningham, “Though many major companies still haven’t taken the leap, most are aware that their current systems are flawed. CEB found that 95 percent of managers are dissatisfied with the way their companies conduct performance reviews, and nearly 90 percent of HR leaders say the process doesn’t even yield accurate information.” In other words, the time and money invested into these annual reviews didn’t accomplish the ultimate goal of driving better performance among team members.
I believe the evolution of performance feedback could be summarized this way:
- Baby Boomers – Give me an annual Review with full documentation.
- Generation X – Make it regular and be sure to share all pros and cons.
- Millennials – I’d like your feedback to be immediate and consistent.
The Changes We Made
At Growing Leaders, we made a decision to do away with these annual performance reviews a few years back. We employ a relatively young team—most of our staff is made up of twenty-somethings. In fact, 60 percent of our team members are Millennials: 20 percent are from Generation X, and 20 percent are Baby Boomers. The once-a-year awkward conversation just wasn’t worth it.
We replaced it with this system:
- Assessments in Real Time.
We believe positive improvement happens when evaluations happen on the spot, between supervisor and team member. So we’ve prepared our full-time team, as well as our interns, to expect evaluative conversations along the way, on a regular basis.
- Spot Talks at Lunch and Learn.
Every Monday, our work stops from 12:00 pm until 2:00 pm so we can focus on personal and leadership development. This gives our executive leaders a chance to speak into issues we face on current problems or issues that crop up.
- Stand Up Meetings.
We kick off our week with a brief meeting called “Stand Up,” in which we remain standing for 15-25 minutes and talk over our highest priorities for that week. The meetings tend to stay short as we summarize our direction. This holds us all accountable to align our work.
- Regular Assessments.
Each week, our vice president, Holly Moore, meets with various team members to provide updates on the work going on. This way, tweaks can be made so that no one veers off too far from effective and efficient work.
- Annual Summaries.
At the end of each year, we do sit down and meet with each team member. At this meeting, however, we don’t do the typical performance review. Instead, we allow the team member to summarize their year:
- What were they most proud of this year?
- What was the biggest disappointment?
- Where did they grow the most?
- What remains to be done?
We actually do both a Review and Preview, but they lead the conversation. It offers far more ownership on the part of each staff person.
I was surprised to see a former intern while traveling last month. We got caught up on each other’s lives, and I got to see firsthand what she was doing now. She was already managing a store. I was proud. During our conversation, she looked me in the eye, got my undivided attention and asked if she could share something.
“Do you know what I appreciate the most about my work experience at Growing Leaders?” she asked. After a pause, she continued. “There were no surprises. The communication was clear and consistent. I never wondered where I stood. I always knew what a ‘win’ looked like and the steps I needed to take to get there.”
After another pause, she smiled. “It got me where I am today.”
While I wish it happened more often, this is what every leader wants to hear.