Deloitte is taking a new and innovative approach to Performance Management

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Our work takes us into a diverse range of organisations and quite often discussions with leaders and their people moves to Performance and Development Reviews (PDR). The majority acknowledge the need for performance appraisals but opinions are many and varied as to their value in today’s fast moving business environment.

Today’s organisations move faster than they used to often resulting in more complexity, the need for people to work on multiple tasks simultaneously (many of which are project based), and the need to change and adapt quickly. Leaders and their people say current PDR models are time consuming and reviews do not occur with sufficient frequency.   The debate continues on the value of ratings and whether they provide real insights for the people being assessed.

Deloitte is one organisation which is “questioning the conventional wisdom of performance management, including its common reliance on cascading objectives, backward-looking assessments, once-a-year rankings and reviews, and 360-degree-feedback tools.”

It seems that many organisations are abandoning rankings and annual reviews; however there does not seem to be any new solutions. Marcus Buckingham, who brought the need to focus on strengths to prominence, and Ashley Goodall have looked at what Deloitte are doing to “design a system that would fairly recognise varying performance, have a clear view into performance anytime, and boost performance in the future .”

Deloitte concluded any new system has to be built around clarity, simplicity, transparency, frequency, and move the person being rated as close as possible to the person best able to rate them, their immediate leader. They concluded that the closer proximity to the leader providing the review allows for more regular updates on performance through quarterly performance “snapshots “ or project by project assessment, plus leaders are expected to do weekly check-ins to keep the process on course.

One other significant difference is that Deloitte is more interested in understanding what leaders would do with their people rather than what they think of their people. To encourage this they provided four future-focused questions for leaders:

  • Given what I know of this person’s performance, and if it was 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”].
  • 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].
  • This person is at risk for low performance [identifies problems that might harm the customer or the team on a yes-or-no basis].
  • This person is ready for promotion today [measures potential on a yes-or-no basis].

One conclusion reached by Deloitte is that at their core PDR’s are about quality conversations, not one conversation based on a fixed point. They also make it clear “We haven’t resolved this issue yet, but here’s what we’re asking ourselves and testing: What’s the most detailed view that we can gather and share? How does that data support conversations about performance? How can we equip our leaders to have insightful conversations? Our question now is not What is the simplest view, but What is the richest?”

This is a development well worth following as Deloitte continue their work. To read the full article by Buckingham and Goodall follow this link https://hbr.org/2015/04/reinventing-performance-management


 

Vivente Australia enables leaders and managers develop the bond between people and performance, creating a powerful advantage: the synergy between people, leadership, management, and culture, produces performance that allows your business to achieve its best.

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