Employees meeting

For years, employees have prepared for their annual review. Some enter with trepidation; others with excitement. What happens during these meetings is no mystery–a manager sits down with his or her employee and discusses the employee’s work annual performance.

While reviews and discussions concerning an employee’s contributions are not exiting the workplace, the structure of the annual review process is currently coming under fire.

Large companies like Microsoft, Adobe, and Accenture are throwing the annual review to the wind, and in its place, adopting a more fluid and more regular evaluation, that no longer rates an employee on a generic scale.

The goal? Reduce interoffice competition and strife and to increase the amount of communication annually. Perhaps the largest challenge of the annual review is that it’s occurrence is far outmatched by the pace of work completed in today’s world. Quarterly reviews may be more fitting, and many large organizations are veering in the direction of that frequency.

But the discarding the traditional review has been met with opposition from both employees and management. Most significantly, employees who have historically scored high on the scale or rating system find that their efforts are no longer met with sufficient rewards. Let’s not forget that the rating scale has been a direct indicator in an employee’s eligible raise amount. Further, data suggests that without a system that praises these high achievers, they often lose interest and motivation.

Managers, too, have expressed dissatisfaction when stripped of the language of the review. Without a rating scale, it becomes increasingly more difficult to communicate the level of which an employee works. It’s also challenging to track progress or to discuss negative slides in an employee’s work history without the presence of a scale.  

While competition in a workplace may not be healthy in high levels, it’s presence has fueled motivation for upward advancement for decades.

The larger question remains–if we’re to discard our current system of reviewing our employees, what system takes it’s place. Further, how can we make sure that the new system is better than our current one?

One company–Deloitte–has dramatically transformed its review process over the past two years. The industry wide audit, consulting, tax, and advisory service based in NYC had a functioning review process that looked no different than many other companies’ systems today.

But after the organization noticed that more than 2 million hours were spent on the review process each year, the majority of which was spent discussing employees behind ‘closed doors’, the company embarked on a radical change to better the process for their 65,000+ employee base.

And today, their review landscape looks and acts completely different. Reviews are now conducted quarterly, and to support the data of an employee’s gross, weekly meetings occur between the employee and his/her direct manager. These frequent check-ins keep employees on track and allow for better communication and transparency company wide.

In addition, the company utilizes a different set of goals to track. No more rating system. And in it’s place–a new mindset for managers to embrace. It’s no longer important how a manager thinks an employees is doing. The emphasis has shifted to where and how the company can best use the employee.

This mindset turns the focus away from the employee’s current position and looks outward and upward to the mobility that the employee is striving to achieve. By tracking this progress–the progress of advancement and promotion, the employee is more engaged and the manager is more focused on supporting the growth of the individual.

While it may be hard for companies to dramatically shift their policy to mirror the new structures at Deloitte, it stands to reason that transparency and a focus on employee growth are important tenets to consider when assessing the annual review process.

As the founder and CEO of Koppekin Consulting, I’m happy to talk with any employers who may wish to re-assess or reshape their current review structures. Contact me today for a consultation on any matter regarding employment in your business.

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