Time for a Rethink: The Decline of Performance Management as We Know It

If you keep up with HR news, you’ll know that dumping performance management is a hot topic.

Over the last few years, both Deloitte and Accenture have announced their intention to drop traditional performance appraisals in preference for more fluid, incremental structures. They’re not the first to do this. In fact, many organisations have been transforming performance management systems for years, including other market leaders such as Microsoft and Adobe Systems, if not fully embracing the “massive revolution” Accenture CEO Pierre Nanterre describes.

What is the case against traditional performance management?

There are many sides to this argument, but the central issue boils down to whether you are returning enough results from the time you invest into performance management. We all know that to simply survive companies are placing a larger emphasis on value engineering, and performance management, like any other process, is subject to review. Performance management is onerous, not only from a paperwork perspective but from the view of organisational productivity. Consider the time, as a leader, you spend on “official” performance management, and your return on investment. Is it worth it?

But haven’t we been talking about the constant need for employee feedback as essential to boosting engagement?

Yes, and it remains so. The point is the way in which it is framed. There’s plenty of research that suggests that traditional performance management can be perceived as a negative process, even when good news is being given. Likewise, the questions that arise over whether performance management – designed to boost productivity and enhance performance – is actually achieving its desired objective now constitute whole practice lines in many leading consultancy firms, clearly demonstrating a disconnect.

How does changing performance management methods relate to you, as a leader?

Reading through Pierre Nanterre’s interview with The Washington Post, in which he talks about Accenture’s plans to implement a more fluid process of performance management in which feedback is given on an ongoing basis, he clearly makes the connection between the evolution of Accenture’s core business area, professional services, and the evolution of performance management as a model.

For him, it is all part and parcel of the same challenge – for the millennial generation, traditional performance management doesn’t work. And just as they have had to evolve the way they do business, they have to evolve the way they manage their business, to remain competitive not only from a market perspective, but in order to secure and retain the best talent.

What does this change look like for organisations like Accenture?

Pierre Nanterre centres his new model on the demand for “instant performance management”, a fluid and ongoing feedback model that can happen as often as every day. For him, it’s about changing the terminology and associations of traditional performance management, stripping out rankings and focusing on non-comparative career management that is centred on real-time opportunities, whilst also leveraging the strengths of the millennial generation such as innovation and an ability to maintain multi-faceted skillsets.

As a last thought, technology is making some major contributions to improving employee feedback and defining the way performance management might look in the future. If you’re keen to find out more, take a look at Josh Bersin, Principal with Bersin by Deloitte, who shares many views on this subject in his recent work, “Employee Feedback is the Killer App.”

Whatever your business area, it’s clear that employee engagement remains one of the global challenges for most organisations across the world. Evaluating your performance management frameworks should be a key priority in any engagement strategy, even more so if your business attracts and retains millennial talent.

Read more: Cunningham, L., Accenture CEO explains why he’s overhauling performance reviews The Washington Post (see here) & Bersin, J., “Feedback is the Killer App” Forbes.

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