Performance Management Case Studies: Revolutionaries and Trail Blazers

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

Note: This blog post was updat­ed in July 2019 for accuracy.

Per­for­mance man­age­ment is an ever-evolv­ing field. The more we learn, the bet­ter we can adapt our per­for­mance man­age­ment sys­tems to make our com­pa­nies health­i­er, more moti­va­tion­al places to work. This is why it is so impor­tant to keep up with the lat­est per­for­mance man­age­ment trends. Com­pa­nies who fall behind lose out to their com­peti­tors. They also run the risk of los­ing their best per­form­ers along the way.

Since 2012, com­pa­nies all over the world have been mov­ing away from old-fash­ioned annu­al appraisals and towards con­tin­u­ous per­for­mance man­age­ment. More than ever before, human resources exec­u­tives and line man­agers alike under­stand the human need for reg­u­lar feed­back, effec­tive coach­ing and human interaction.

A num­ber of rev­o­lu­tion­ary com­pa­nies have led the way in dra­mat­ic changes to how organ­i­sa­tions — both For­tune 500 multi­na­tion­als and SMEs — con­duct their per­for­mance reviews and moti­vate their employ­ees. 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. Here at Clear Review, we have helped over 200 organ­i­sa­tions effort­less­ly shift away from tra­di­tion­al annu­al appraisals.

Below, we have col­lat­ed five notable per­for­mance man­age­ment case stud­ies. These organ­i­sa­tions have shak­en up their exist­ing process­es and have reaped sig­nif­i­cant ben­e­fits in terms of pro­duc­tiv­i­ty, employ­ee engage­ment, morale and performance.

1. Adobe Intro­duced Con­tin­u­ous per­for­mance Man­age­ment in Place of Per­for­mance Appraisals

Adobe was the fore­run­ner of change when they aban­doned annu­al per­for­mance appraisals back in 2012. They felt that while they were forg­ing ahead and evolv­ing as a com­pa­ny, their per­for­mance man­age­ment sys­tem was archa­ic and inef­fec­tive. It was a waste of time and had, ulti­mate­ly become a box-tick­ing exer­cise. Adobe esti­mat­ed annu­al appraisals con­sumed 80,000 man­age­ment hours each year. This was the equiv­a­lent of near­ly forty full-time employ­ees work­ing year-round. Clear­ly, a change was needed.

Adobe replaced annu­al appraisals with reg­u­lar one-on-one 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, based on their work cycles. Now that forced rank­ing has been abol­ished, employ­ees at Adobe are assessed based on how well they meet their goals. Man­agers are also trained on the nuances of giv­ing and receiv­ing feedback.

The result has been a marked increase in employ­ee engage­ment, with vol­un­tary turnover decreas­ing by 30% since check-ins were intro­duced. This makes Adobe a per­for­mance man­age­ment case study we should all be aware of.

Take a Tour of Our Con­tin­u­ous Per­for­mance Man­age­ment Soft­ware.

2. Deloitte Saved 2 Mil­lion Work­ing Hours per Year with Week­ly Employ­ee Check-Ins

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

Deloitte’s new per­for­mance man­age­ment process requires every team leader to check in with each team mem­ber once a week to dis­cuss near-term SMART goals and pri­or­i­ties, com­ment on recent work and pro­vide coach­ing. The check-ins are ini­ti­at­ed by the team mem­bers, rather than the team lead­ers to ensure these check-ins take place fre­quent­ly. This also serves to give employ­ees a sense of own­er­ship over their work, role and time.

These week­ly employ­ee check-ins are sup­port­ed by quar­ter­ly reviews when 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 (GE) Put an End to​Forced Rank­ing 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. After­wards, the bot­tom 10% were fired. Not exact­ly a recipe for employ­ee engage­ment! Such an envi­ron­ment is a breed­ing ground for unhealthy com­pe­ti­tion, reduced team­work and employ­ee burnout.

In 2015, under CEO Jeff Immelt, GE announced it was replac­ing this approach with fre­quent feed­back and reg­u­lar con­ver­sa­tions called​”touch­points” to review progress against agreed near-term goals. This new approach was 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 is 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 Accenture’s CEO, Pierre Nan­terme, stat­ed at the time ​“It’s huge, we’re going to get rid of prob­a­bly 90 per cent of what we did in the past.”

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 Coach­ing 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”.

Cargill 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.

Per­for­mance Man­age­ment Lessons to Be Learned from These Per­for­mance Man­age­ment Case Studies

When we look at what these five organ­i­sa­tions have imple­ment­ed, we can see some evi­dent 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, pos­i­tive and con­struc­tive feed­back from peers and man­agers 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.

Move away from annu­al appraisals to con­tin­u­ous per­for­mance management

Find out how our sim­ple, effec­tive per­for­mance man­age­ment soft­ware can help you move away from annu­al per­for­mance appraisals towards a more agile, intu­itive per­for­mance man­age­ment sys­tem. Book a free demo of Clear Review where our expert team will take you through the platform. 

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