3 Top Companies Who Axed Traditional Performance Reviews (And What They Do Instead)

Performance reviews have been the corporate whipping boy for a few years now. In reality, though, the top companies who have been praised for getting rid of annual reviews aren’t getting rid of them altogether. They’re simply using employee performance review alternatives — like performance management tools and strategies — to reduce costs and increase effectiveness. Here’s what a few of those companies have replaced their annual performance reviews with:

Adobe Performance Reviews

They famously axed performance reviews in 2012. Except, not entirely. They just swapped them for ongoing “check-ins.” It all started when Donna Morris, senior vice president of global people resources at Adobe, noticed that their performance review system wasn’t hitting its goals.

Why the new approach?

Adobe decided their review system should be more about inspiring people to do their best work. They also wanted to stop fostering negative competition within teams and to find a system that better fit their core value of being genuine—their traditional performance rankings weren’t accomplishing this.

Features of the new system include:

· Clear expectations

· Frequent feedback (both positive and constructive)

· No ratings or rankings

· Department-specific intervals

Results:

· Increased teamwork

· Reduced voluntary attrition

Check out Adobe’s account of reinventing their reviews to get all the details.

Download our ebook on 13 Ways to Get Reward and Recognition Right

General Electric Performance Reviews

In the past, GE booted the bottom 10 percent of employees every year. Not anymore. Their Head of Human Resources, Susan Peters, noticed it was “more a ritual than moving the company upwards and forwards.” So they left it behind and instead adopted an app called “[email protected]” (performance development at GE).

Why the new approach?

GE wanted managers who were coaches, not critics. They also wanted to “facilitate more frequent, meaningful conversations between managers and employees and among teams.”

Features of the new system include:

· Constant feedback (plus, employees can request feedback at any time)

· A list of short-term goals

· Instead of “strengths” and “weaknesses,” employees are given behaviors to “continue” and “consider changing”; changing the focus from looking back to looking forward.

Results:

· Increased productivity fivefold in the first year

· Decreased costs

Want to learn more? Read what two GE executives wrote about their new review process.

Deloitte Performance Reviews

When a study revealed almost 60 percent of executives believed their performance management approach wasn’t helping increase employee engagement and performance, Deloitte decided it was time to make a change. They needed “something squarely focused on fueling performance in the future rather than assessing it in the past.”

Why the new approach?

Internal research revealed that managers were spending 2 million hours (!!!) per year on performance reviews—and most of that time was spent amongst managers discussing employees. They decided they would rather spend time helping employees do what they do best every day. Their new goal: “to recognize, see, and fuel performance.”

Features of the new system include:

· Responses from managers about future scenarios/possibilities (e.g. “Given what I know of this person’s performance, I would always want him or her on my team”)

· Weekly check-ins

· A tool for employees to self-assess and share their greatest strengths

Results:

· Saved time

· Better data about employees

Read more about Marcus Buckingham and Ashley Goodall’s reflection on Deloitte’s performance management changes.

Just like these leading companies found, there’s a lot of value in fixing the broken performance review process. By drilling down to the real purpose of reviews—to help employees do their best work—they were able to create performance review alternatives and reap the benefits of managing performance. Take a look at the way your company is managing performance to see if it’s time for you to make a change.

We’ve been helping customers all over the world change how they manage performance. See how our performance management tools can help you increase employee engagement and performance better than your current system. Download the overview.