Performance is variably tied to compensation for many organizations, and this increases the importance of performance measurement. According to a survey conducted by Sibson Consulting, 66 percent of respondents stated that the main objective of performance reviews is to decide on compensation. Of these respondents, only 46 percent saw talent management as the primary goal.
The survey, conducted among multiple countries across a wide range of industries, revealed that there was a widespread lack of trust in performance management. According to Stanford University Professors Jeffrey Pfeffer and Robert Sutton, compensation for performance are generally ineffective when tasks are complex or require collaboration. Let alone the already delicate nature of assessing someone’s performance accurately, tying it to compensation increases the importance of handling the issue with utmost care.
For Deloitte, seeing performance means getting an accurate picture of someone’s performance, thus eliminating the idiosyncratic rater effect and streamlining the review process beginning from evaluation to the final rating. The solution to the first problem is to redesign how Deloitte constructs feedback questions and to whom these questions were directed. Deloitte decided that it is best if the feedback is provided between the immediate team leader and the team member to increase the efficiency of feedback.
The most important action that Deloitte has taken is to ask immediate team leaders to evaluate their future intentions with team members instead of their skills. The nuance lies in the fact that, with the new structure, team leaders rate themselves on their intentions with the given employee. The new feedback structure included questions such as “Given what I know of this person’s performance, I would always want him or her on my team”. The phrasing of the question allows the team leader to base his judgement solely on his available knowledge.
Language is of vital importance when handling the sensitive topic of performance reviews. Words such as ‘rating’ comes with a negative connotation and does not fully represent the new system applied at Deloitte. That’s why the new performance review process was named ‘performance snapshot’ – giving the message that performance is evaluated at a single moment in time rather than in a given quarter or per year.
Fueling performance emphasizes the essence of performance reviews; that is, to help improve one’s performance in the future. For this, Deloitte decided to implement regular Check-in conversations, à la Adobe.
Deloitte actually looked up to the trailblazer digital services giant in implementing regular Check-ins. In a report on the future of performance management, Deloitte provides insight into how well Adobe’s new system has been working three years into its invention. Engagement surveys at Adobe prove that employees have a much more positive outlook on performance reviews and report receiving better, actionable feedback. Despite the highly competitive market that Adobe operates in, voluntary leaves at the company have been gradually declining.
Inspired by Adobe’s success, Deloitte has constructed their Check-in conversations to be a key part of team leaders’ work. Required to have it once every week to review latest projects, team leaders are instructed to set expectations for their employees and provide coaching for the upcoming week(s). In order to help team leaders save more time, check-in conversations are initiated by team members. This way, employees are also given ownership of their own course of development.
What's the solution?
By recognizing, seeing and fuelling performance, people at Deloitte hope that they will be able to support their annual compensation, quarterly performance reviews and frequent feedback processes. By using a purpose-built platform like Impraise, users are enabled to provide in-depth feedback on immediate performance, as well as more structured feedback moments – all in one place. This makes it easier for everyone across the organization to share and receive feedback in one place, but it also allows HR to maintain full visibility.
Whether between an employee and an immediate team leader or between co-workers, feedback cycles can be structured in any way. The feedback gathered over the course of a year can be used to provide analytics on the learning and development progress of a specific employee, allowing managers to see how much an employee has developed, or if there are any coaching opportunities to help them improve. The data could then be used to give compensation-related decisions, which are much more precise and fair.
The feedback platform on Impraise allows any employee to see their performance data real-time. This level of transparency is also the last point that is important to Deloitte – enabling employees to know where they stand.
The next challenge that Deloitte and the world of performance management face is factoring in many facets of someone’s performance in a way that is understandable and scalable. According to Deloitte, big data should not be regarded as a way to oversimplify someone’s performance. Instead, providing the richest possible snapshot of someone’s performance should be the next frontier.
To learn more about how you could re-evaluate your performance management processes, download a free copy of our latest Impraise Guide to People Enablement Programs, below.