Deloitte Touche, the mega-accounting and consulting firm, radically changed the way they do performance appraisals. I'm sure Deloitte used to advise clients how to do better appraisals, including expansion of 360 feedback mechanisms and so on. As described in a recent Harvard Business Review article, they finally listened to what many people have said and did away with most of what we know about performance feedback.
They created their new system with three objectives: recognize performance through performance snapshots and annual compensation reviews; to recognize it clearly by asking the managers what their future actions will be with respect to an individual; and to 'fuel' performance. Towards the latter, they set up requirements for weekly check-ins that should have already been part of the manager's job.
Startling, it took Deloitte so long to recognize that only 21% of the appraisal variances were due to the individuals' performance variability but that much more of the appraisal differences were due to the managers' perception and ability to recognize differing performance levels objectively. Therefore, it will be interesting to see how well their second objective will be met.
I know I harp on performance appraisals a lot. And it's interesting that HBR also published an article in the same issue that argued the way to get better performance from the organization--particularly in the sales staff--is to track performance, identify predictors of success, select people with the appropriate skills and traits and put new recruits through regimented education program.
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