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Performance Management Case Studies: Revolutionaries and Trail Blazers

Top companies that led in setting new performance management trends. Read our new Performance Management Trends for 2018 article

Five com­pa­nies that have led the way in set­ting new per­for­mance man­age­ment trends

Rarely a day that goes by with­out news that a com­pa­ny has altered one of its per­for­mance man­age­ment process­es or intro­duced a new per­for­mance man­age­ment tool to boost pro­duc­tiv­i­ty. So it’s essen­tial that for­ward-think­ing com­pa­nies keep up to date with the lat­est in HR trends and recent case stud­ies to make sure they are get­ting the best out of their employees.

A num­ber of rev­o­lu­tion­ary com­pa­nies have led the way for dra­mat­ic changes in how organ­i­sa­tions — both For­tune 500 multi­na­tion­als and SMEs — con­duct their per­for­mance reviews and man­age their staff. In their wake, com­pa­nies the world over are adapt­ing their per­for­mance man­age­ment prac­tices and read­just­ing their once-firm­ly held beliefs regard­ing per­for­mance rat­ings and annu­al per­for­mance appraisals.

Below, we have col­lat­ed five impor­tant case stud­ies of organ­i­sa­tions who have shak­en up their exist­ing process­es and have reaped sig­nif­i­cant ben­e­fits in terms of pro­duc­tiv­i­ty and performance.

1. Adobe intro­duced con­tin­u­ous per­for­mance man­age­ment in place of annu­al reviews

Adobe were the fore­run­ners of change when they aban­doned annu­al per­for­mance appraisals back in 2012. They replaced them with reg­u­lar check-ins, sup­port­ed by fre­quent feed­back – both pos­i­tive and con­struc­tive. There are no per­for­mance rat­ings or rank­ings and they allow dif­fer­ent parts of the organ­i­sa­tion to deter­mine how fre­quent­ly they should hold check-in con­ver­sa­tions, accord­ing to their work cycles.

The result has been a marked increase in employ­ee engage­ment, with vol­un­tary turnover decreas­ing by 30% since check-ins were introduced.

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2. Deloitte saved 2 mil­lion work­ing hours per year with week­ly check-ins

Deloitte was the first big name to announce in 2015 that it was scrap­ping once-a-year per­for­mance reviews, 360-degree feed­back and objec­tive cas­cad­ing. This was after it cal­cu­lat­ed that these process­es were con­sum­ing a remark­able 2 mil­lion hours a year across the organisation.

Deloitte’s new process requires every team leader to check in with each team mem­ber once a week to dis­cuss near-term work and pri­or­i­ties, com­ment on recent work and pro­vide coach­ing. To ensure these check-ins take place fre­quent­ly, the check-ins are ini­ti­at­ed by the team mem­bers, rather than the team leaders.

These week­ly check-ins are sup­port­ed by quar­ter­ly reviews in which team lead­ers are asked to respond to four future-focused state­ments about each team mem­ber. Rather than ask­ing team lead­ers what they think of the team mem­ber, which is what tra­di­tion­al per­for­mance rat­ings do, they ask what the team leader would do with the team member.

3. Gen­er­al Elec­tric put an end to rank and yank’ per­for­mance management

Under the reign of its for­mer CEO, Jack Welsh, Gen­er­al Elec­tric was the most well-known pro­po­nent of annu­al per­for­mance rat­ings and forced dis­tri­b­u­tion curves. For decades, GE oper­at­ed a rank and yank’ sys­tem, where­by employ­ees were appraised and rat­ed once a year, fol­low­ing which the bot­tom 10% were fired. Not exact­ly a recipe for employ­ee engagement.

In 2015, GE announced that it was replac­ing this approach with fre­quent feed­back and reg­u­lar con­ver­sa­tions called touch­points’ to review progress against agreed near-term goals. This is sup­port­ed by an online and mobile app, sim­i­lar to our own Clear Review per­for­mance man­age­ment tool, which enables employ­ees to cap­ture progress against their goals, give their peers feed­back and also request feedback.

Man­agers will still have an annu­al sum­ma­ry with employ­ees, look­ing back at the year and set­ting goals, but this con­ver­sa­tion will be more about stand­ing back and dis­cussing achieve­ments and learn­ings, and much less fraught than annu­al reviews.

4. Accen­ture aban­doned rat­ings for per­for­mance development

As of Sep­tem­ber 2015, Accen­ture, one of the largest com­pa­nies in the world, dis­band­ed its for­mer rank­ing and once-a-year eval­u­a­tion process. Like GE, Accen­ture has decid­ed to put fre­quent feed­back and con­ver­sa­tions at the heart of its new process and focus on per­for­mance devel­op­ment, rather than per­for­mance rating.

As Ellyn Shook, Chief HR Offi­cer at Accen­ture, stat­ed: Rather than tak­ing a ret­ro­spec­tive view, our peo­ple will engage in future-focused con­ver­sa­tions about their aspi­ra­tions, lead­ing to actions to help them grow and progress their careers.”

5. Cargill intro­duced on-the-job con­ver­sa­tions in place of annu­al appraisals

Like Adobe, Cargill, the US food pro­duc­er and dis­trib­u­tor, start­ed to trans­form its tra­di­tion­al per­for­mance man­age­ment process­es back in 2012, when it intro­duced Every­day Per­for­mance Man­age­ment’. It removed per­for­mance rat­ings and annu­al review forms and instead focused on man­agers hav­ing fre­quent, on-the-job con­ver­sa­tions and giv­ing reg­u­lar, con­struc­tive feed­back. They have made this work by:

  • Reg­u­lar­ly reward­ing and recog­nis­ing man­agers who demon­strate good day-to-day per­for­mance man­age­ment practices.
  • Shar­ing the expe­ri­ences and tips of their suc­cess­ful managers.
  • Hold­ing teams account­able for prac­tis­ing day-to-day per­for­mance management.
  • Build­ing the skills need­ed to suc­ceed at Every­day Per­for­mance Man­age­ment, includ­ing effec­tive two-way com­mu­ni­ca­tion, giv­ing feed­back, and coaching.

The out­come has been impres­sive, with 70% of Cargill employ­ees now say­ing they feel val­ued as a result of their ongo­ing per­for­mance dis­cus­sions with their manager.

Sum­ma­ry

When we look at what these five organ­i­sa­tions have imple­ment­ed, we can see some very clear trends emerg­ing which are like­ly to form the basis of per­for­mance man­age­ment for the years to come. These trends are:

  • Reg­u­lar one-to-one per­for­mance con­ver­sa­tions, or check-ins’, ini­ti­at­ed by the employee.
  • Fre­quent, in-the-moment feed­back from peers and man­agers, both pos­i­tive and constructive.
  • Near-term objec­tives rather than annu­al objec­tives. Set­ting and review­ing objec­tives reg­u­lar­ly, rather than once a year.
  • For­ward-look­ing per­for­mance reviews, focus­ing more on devel­op­ment and coach­ing and less on assessment.
  • Drop­ping per­for­mance rat­ings.
  • Per­for­mance process­es sup­port­ed by mobile-friend­ly online per­for­mance man­age­ment soft­ware.