Deloitte Touche Tohmatsu Limited, or Deloitte for short, is one of the ‘Big Four’ accounting firms and the world’s largest professional services firm. The company has over 244,000 employees and has its operational headquarters in New York City, US.
Like most other companies around the globe, Deloitte realised that performance management processes involving forced ranking, rigid rating systems and once-a-year appraisal processes are actually damaging employee engagement and alienating high performers.
What’s more, Deloitte calculated that the performance management processes (completing forms, holding meetings, and creating ratings) consumed close to 2 million hours each year! Instead of wasting time and money on ineffective and counterproductive performance management processes Deloitte decided to scrap the annual evaluation cycle and replace it with ongoing feedback and coaching.
The general principle of the new performance management system - and similar systems implemented by companies such as Accenture, Microsoft, Adobe, Gap, and others – are:
In a survey Deloitte itself conducted, it found that more than half of the executives surveyed did not believe their employee review systems drove employee performance or engagement. And they’re not alone. According to a different survey, six percent of Fortune 500 companies have already replaced traditional annual review performance rankings, and the number is growing.
Ideas and insights you can steal
Deloitte has replaced their one-a-year, rating-based performance management processes because it is damaging employee performance and disaffecting the best performers. Follow in their footsteps and create performance management processes that create regular discussions that focus on coaching and development.
Bernard Marr is an internationally bestselling author, futurist, keynote speaker, and strategic advisor to companies and governments. He advises and coaches many of the world’s best-known organisations on strategy, digital transformation and business performance. LinkedIn has recently ranked Bernard as one of the top 5 business influencers in the world and the No 1 influencer in the UK. He has authored 16 best-selling books, is a frequent contributor to the World Economic Forum and writes a regular column for Forbes. Every day Bernard actively engages his almost 2 million social media followers and shares content that reaches millions of readers.