Recently, a cavalcade of arguably some of the world’s most performance-oriented companies, from Accenture to Deloitte and many others, dumped their annual performance review systems.  Citing a means that does not justify an end, Accenture CEO Pierre Naterme claims that much research, including their own, shows that the money, time and effort put into performance reviews ultimately fails to accomplish their main goal, which is to drive better performance amongst employees.  Furthermore, claims Deloitte’s Head of People Alex Bashinksy, the performance review is such a defunct exercise, that it has altogether ‘lost its effectiveness as a tool to gather information about talent.’

The announcements have sparked a fierce national debate amongst HR professionals – what, then, is the alternative to determine pay rises, bonuses and promotions? And can it really be as simple as just getting rid of performance reviews? What about those who can’t afford to do so?

What are the alternatives?

The alternative, at least according to Deloitte, is a process that is characterised by informality, continuous appraisal, and real-time performance feedback.  Operationally, this translates into regular (weekly) check-ins between managers and their employees, a quarterly engagement survey of only 10 questions that managers distribute, and a quarterly, 4 question performance snapshot.  All feedback mechanisms are then collectively used to decide pay rises, bonuses, and promotions.

Given the incredible pace of change that is being experienced in workplaces nowadays, coupled with increasingly high workforce turnover, and Generation Y’s incessant insistence on feedback, it is easy to see why Deloitte implemented the system it did.  Managers benefit – they are given regular opportunities to provide feedback, and nip any problems in the bud before they escalate, ensuring better employee performance overall, and employees also benefit – they are given regular opportunities to give and receive feedback, ensuring they have ample opportunity to improve their performance and hence receive pay rises, bonuses and promotions.  

So is it really as simple as that? Is it time for Annual Performance Reviews to rest in peace?  

Is it really that simple?

Although Deloitte and Accenture’s intentions are commendable, for many organisations, getting rid of the annual performance review system may not be that simple – unless they have the budget to make a wholesale change, and the technology to support it.  Many organisations who are stretched for resources, and time, may find the prospect of quarterly, or even more regular, reviews, completely daunting, and financially unmanageable – which HR department is flushed for funds for systems upgrades, after all?

The good news is that changing your performance review structure, and frequency, may not be as hard as it seems.  Cutting edge technology, such as this mLearning platform by Teazl,  enables managers and employees alike to give real-time feedback, quickly, simply, and on their mobile phone.  Better still, this type of technology is not half as expensive as you would think – a monthly subscription can cost less than accumulated price of your daily lunch.  

Although the results of Deloitte and Accenture’s changed performance review systems have yet to be seen, the rationale is clearly there – Annual Performance Reviews are headed for the grave, and fast.  And for all organisations wishing to follow suit, that may not have the budget for a full system upgrade, mLearning platforms can provide a great alternative to give your employees the fast, real-time feedback that they so desperately need.  

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