Best of TLNT 2017: Here’s What Happened When Deloitte Dumped the Annual Review

Editor’s Note: It’s an annual tradition for TLNT to count down the most popular posts of the previous 12 months. We’re reposting each of the top 30 articles through January 2nd. This is No. 5 of 2017. You can find the complete list here.

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This professional services organization tackles the burdensome problem of performance reviews with a program that provides more frequent opportunities to check in — with more effective results.

Performance reviews are supposed to help employees stay on track, but at many companies they turn into a huge, time-consuming headache full of paperwork and tedious meetings. Deloitte — which employs tens of thousands of professionals at offices throughout the world — decided to change that with a new system they launched company-wide last summer after a years-long pilot program.

Using frequent, short, informal check-ins, which employees schedule when they want them, Deloitte keeps an open dialogue between employees and their managers. Feedback happens in real-time, rather than in huge end-of-the-year batches.

The driving philosophy is that after a year, it’s too late to give effective feedback on the small stuff and annual evaluations tend to focus on the past rather than the future. In contrast, the new check-ins are a “forward look at near-term goals,” says Chief Learning Officer, Leader Development & Performance, Jeff Orlando.

“It’s not about someone telling you what you did right or wrong,” Orlando says. “It’s about looking forward and setting yourself up for success.”

Snapshots look to the future

The other major element of Deloitte’s performance management technique is a system of snapshots, which are slightly more official than the check-ins, but still nothing like a traditional performance review. The snapshots consist of a four-point evaluation that leaders fill out for each member of their team, at least quarterly, but usually more often. The prompts are geared toward the future, rather than evaluating the past:

  • “Given what I know of this person’s performance, and if it were my money, I would award this person the highest possible compensation increase and bonus.” This question is intended to measure overall performance and unique value to the organization on a five-point scale from “strongly agree” to “strongly disagree.”
  • “Given what I know of this person’s performance, I would always want him or her on my team.” Measures ability to work well with others on the same five-point scale.
  • “This person is at risk for low performance.” Identifies problems that might harm the customer or the team on a yes-or-no basis.
  • “This person is ready for promotion today.” Measures potential on a yes-or-no basis.

Too much time on paperwork

Before the new system, Orlando says, Deloitte employees were spending 1.8 million hours per year on performance management — mostly filling out paperwork. And while specific results on time savings under the new system aren’t yet available, participants are confident that the time dedicated to performance reviews now is being spent more productively.

“We’re trying to reduce or eliminate that specific administrative burden. We’ve radically reduced the amount of paperwork. That’s about respecting people’s time,” he says.

Employees and managers have voiced positive outcomes. “We’ve heard, ‘This is easier and better,’” Orlando says. “We’ve heard stories of people having real ‘aha’ moments during conversations with their leaders.”

Andrea Schulz, senior manager of Deloitte’s tax branch, has been using the system for three years as part of the original pilot program. She has experience from both sides — she uses the system to give feedback to people who report to her, and she has her own with her supervisors.

“Sometimes when I’m delivering feedback [to employees], I relate it to myself and might ask the same questions to my manager,” she says.

Catch problems early

Schulz says the frequency of the check-ins has definitely helped her address problems in a timelier fashion. For example, she recently sent a communication to a coworker who misinterpreted her tone. Having frequent check-ins allowed her to hear about the problem and address it before it escalated into resentment or conflict.

“The fact that we’re sitting down so often allows things like that to be caught right away and corrected,” she says. “It’s casual, informal, which leads to more constructive conversations.”

In addition to catching problems right after they happen, frequent check-ins also serve to set expectations before problems even arise. Schultz recently gave feedback to a junior employee whose project turnaround time was slower than what’s expected at Deloitte, and she says that being able to correct that course before it got too far off prevented it from becoming a bigger issue.

Orlando adds that clients also benefit because regular check-ins help employees feel confident in their work, and “when people are happy and energized, they do better work.”

Implementation challenges

Implementation of the program wasn’t without its challenges. According to Schulz, in the early days of the pilot the biggest issue was getting people to actually schedule their check-ins as frequently as planned. “We weren’t used to it, so we’d go longer without them,” she says, “which made the conversations longer.”

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“It asks more of you as a manager, to really know your people,” Orlando says. “The challenge now is supporting managers in taking on this responsibility.”

While there were some growing pains, the lengthy pilot program allowed them to work out most of the kinks before implementing the check-ins and snapshots company wide.

“Initially, we thought we’d hold back the data from the snapshots behind a curtain,” Orlando says, but employees wanted to see them, so now Deloitte shows each employee an aggregate of their snapshots in relation to their peer group.

By delivering bite-size, concise feedback on a more frequent schedule, the burden of annual reviews is reduced for managers, while employees are given the direction and feedback that spurs engagement and productivity, making it a win-win for all.

This article was originally posted on OpenWork, a nonprofit committed to inspiring companies to continuously improve how, when, and where work is done for the mutual benefit of employees and employers.

Kathleen Christensen

Kathleen Christensen is a member of the board of directors at OpenWork, a new nonprofit inspiring companies to continuously improve how, when, and where work is done for the mutual benefit of employees and employers. Kathleen directs the Alfred P. Sloan Foundation’s Working Longer program. Previously, Dr. Christensen established and led Sloan’s 17-year pioneering program on working families, including spearheading the first national workplace flexibility campaign. Dr. Christensen planned and participated in the 2014 White House Summit on Working Families and the 2010 White House Forum on Workplace Flexibility. In 2010, Dr. Christensen was named by Working Mother magazine as one of the “Seven Wonders of the Work-Life Field.” In 2004, Families and Work Institute honored her with the inaugural Work-Life Legacy Award as a founder of the work-life field.