By Anna Tavis, Ph.D.
Have you followed the drama in the media lately stirred by some big name companies scrapping the old performance appraisal process to make room for more agile, employee friendly and manager–centric versions of managing employee performance—the so called "check-ins" The Trouble with Grading Employees (WSJ)?
Strong language has been used to signal a radical breakaway from the familiar annual performance appraisal routines. Provocative headlines such as “Kill Performance Ratings,” “Get Rid of Performance Review!“ “Abolish Performance Appraisals!” and similar titles have announced the coming of the new age in Human Resource Management. It felt like most radical leap forward since the invention of management itself.
To be sure the legacy annual performance appraisal system has been created in the industrial era. The prevailing management philosophy then was about management control over an individual employee. It specifically targeted those who were failing to deliver. On paper, it was a perfect system to go after “the guilty” and identify the “top performers” and “high potentials.”
Today’s business objectives have radically changed. Business now is looking to shift away from those industrial age structures and unlock the talent potential of all its employees. High performance today is achieved through collaboration among employees at all levels who act more like free agents than “the organization men.”
The call for the radical overhaul of the internal appraisal systems first came from the hi-tech sector known for its low tolerance for tradition. Now the trend is spreading across other industries affecting every type of organization.
If you took away the hype and face the facts, performance management overhaul is just another much overdue upgrade to the next-generation organizational operating process. Compare this trend to your daily technology upgrades that have become a normal way of life in this crowded consumer world of ours. Reminders pop up on our screens every day urging us to get on to the next version or to download a new and improved app. Whether we like it or not, we are reminded that the old system is no longer supported, leaving us with no other choice but to upgrade. Why should traditional performance appraisal be an exception?
Take Adobe, recently profiled in Fortune as the world’s No. 124 largest capitalization company, which ditched annual performance reviews in 2011 replacing them with frequent “check-ins.” This radical HR move has paid unexpected dividends.
The company accelerated its product development cycle, improved its market performance and kept its employees engaged and motivated outcompeting its rivals in Silicon Valley’s most intense talent market. Four years into its transformation, Adobe is leading the market in performance. The company’s stock price has increased from $30 to more than $80 since the performance management transformation was launched.
A few technology players followed Adobe’s bold move at first. In 2015, however, official groundswell has begun, with a few companies joining in the performance transformation movement almost every day.
More trend watching and analyses of this transformational phenomenon are coming from many corners. HRPS, SHRM's Executive Network, held an intense panel discussion on this topic at its conference in April. New York-based Neuroleadership Institute is about to unveil their analysis of the new global practice at the annual Neuroleadership Summit in November. Bersin by Deloitte partnered with Markus Buckingham to overhaul Deloitte’s performance system and they wrote about the results in HBR. SIOP’s Leading Edge Consortium in October promises to offer a fresh look at performance management from the industrial psychology perspective. Watch this space to follow and stay informed of the twists and turns in this performance transformation process.
To return to my headline, and putting all drama aside, the day is close when performance “check-ins” will be just another app to install on your mobile device. If you wanted to know your performance level today, along with your health and wellness ratios, the weather and the market, just turn on your smartphone or your smartwatch. With the most current information at your finger tips, you will know when to dial up or dial down. Besides, your coaching advice will always be available on the same app—and just in time.
This future is already here, and it is upon us to accelerate its adoption and acceptance.
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Anna A. Tavis, Ph.D., is executive editor of the People + Strategy journal and an adjunct graduate professor at New York University. She can be reached at firstname.lastname@example.org or http://annatavis.com.