One of the truisms of management seems to be that certain practices go in and out of favor, and some seemingly good ideas are just fads. But another management truth also has merit: The fundamentals are timeless. Good management practice is good management practice, regardless of the age.
One of the most tried-and-true forms of management is feedback. Exchanging information with subordinates is indispensable to good performance. The One Minute Manager® said it best in 1982: “Feedback is the breakfast of champions.” That still holds true today.
Yet recent reports have repeated the news that Accenture has “dropped” performance appraisals. In what seemed to be a continuous recycling of the core elements in the story, they indicate that appraisals have been around since the third century in China. Hmmmm, I would think that a practice that has been around for 1,800 years might have some value. Nonetheless, how does one reconcile their long-held use with their reportedly widespread unpopularity? Well, let me offer Mark Twain’s infamous words as if they were spoken by appraisals themselves, “The tales of my demise have been greatly exaggerated.”
The real story behind performance appraisals
Here is why appraisals are not going away, and why the hundreds of reports of Accenture dropping them are not quite accurate.
First, if you read Accenture’s CEO statements closely, you will find that information about how employees perform is shared after every major assignment within the company. Many professional services firms have some sort of after-action project report that is generated for the employees on that assignment, their managers, and their clients. In places where this system of feedback is already in place, formal appraisals can be duplicative, especially if these periodic feedback sessions are documented.
Second, the CEO indicated that they were not getting rid of 100% of what we did, only 90%. While their actual process has not been publicized, I would guess that what is being retained is their existing system of sharing information with employees about how they are doing. In most places, it is called feedback.
According to what I can discern, Accenture is getting rid of:
- Waiting until the end of the year to share information
- Comparisons to other people
- The formal annual meeting
- Their traditional annual documentation process
However, Accenture is not getting rid of:
- Feedback: Sharing information with employees about how they are doing
- Timeliness: Information given at the point of performance to direct, correct, or encourage
- Coaching: Individual meetings with employees designed to drive improvement
What remains is an individualized process that is focused on helping each employee perform better.
What it all means
Here is the chief lesson learned from the move at Accenture: While the headlines were sensational, the actual facts follow sound management practice. The goals of performance management have not changed. However, the practice of how they actually manage performance is adjusting to a new reality.
As an example, Generation Xers demand more frequent consultation about how they are doing. If you would allow me just a small big of braggadocio, you can read my book, Performance Conversations: An Alternative to Appraisals, that I published in 2006. It advocates an approach to management that is aligned with Accenture’s new approach. The book outlines a structured system of feedback. Feedback is king, long live feedback.
Assuming that organizations would like to have some documentation that these feedback sessions occurred during the year as planned, they are likely to be collected and compiled. If compiled, the annual year-end performance appraisal can be replaced by something that could be aptly renamed the Performance Summary. This summary could be used for a variety of management purposes such as raises, promotions and determining who gets certain development opportunities. This idea is also found in Performance Conversations.
Finally, in the aforementioned news reports, they announce a growing list of leading companies – Adobe, Microsoft, Deloitte, Kelly Services, and others – who are experimenting with different ways of managing performance. In my next post I will decode what they are doing in these companies, and you will see a clear pattern emerge. Here is a hint of what you will find – structured systems of feedback.