Jul 20, 2016

In the Harvard Business Review of April 2015, an article entitled Reinventing Performance Management, by Marcus Buckingham and Ashley Goodall, described Deloitte’s complete overhaul of Performance Management (PM) as we know it.

Let’s face it, it’s been long overdue! The way PM used to work in prehistoric times, was the gruelling year-end paperchase of hauling the annually determined KPI’s out of mothballs, scurrying around to give consensus ratings to subordinates, (sometimes with 360 degree feedback thrown into the mix) and then a quick chat about setting the new objectives – and phew, PM over for another year! Quite frankly, not to bother doing it at all then.

So what has Deloitte done differently? Well, they haven’t abandoned the idea of managing performance, or done away with tracking outcomes. What they have done, is approach it really differently; something that is “nimbler, real-time, and more individualised—something squarely focused on fueling performance in the future rather than assessing it in the past”.

They have tried to shift their focus from the review, to a future focus. After a huge amount of research of their own employees, they identified that the top performance teams at Deloitte’s comprised people who said ”My co-workers are committed to doing quality work,” “The mission of our company inspires me,” and “I have the chance to use my strengths every day.” In other words, Deloitte’s was looking to base their new system on strengths. Three aspects were of critical importance: compensation and measurement, making information about performance visible, and improving/strengthening performance.

A visible Matrix: In the compensation arena, information is quantified statistically on a matrix based on two key statements that Team Leaders consider when rating a team member for a quick snapshot of their current performance: (X axis) “I would always want this person on my team” and (Y axis) “I would give this person the highest possible compensation” (Many snapshots of individual performance exist over the period of a project, and additionally, all individual team members’ matrices are visible. This means snapshots are both individual, and relative to the team as a whole.)

Performance actions: Another difference in approach is that the rater (Team Leader) does not rate the individual but rather what their own future actions might be with respect to their team member. They do this at the end of every project, or if it’s longer term, then it occurs on a quarterly basis. They look to the future, and decide actions, rather than weighing up past and what they think of the individual. To help them, four questions are considered by the Team Leader:

1. 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 [measures overall performance and unique value to the organization on a five-point scale from “strongly agree” to “strongly disagree”].
2. 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].
3. This person is at risk for low performance [identifies problems that might harm the customer or the team on a yes-or-no basis].
4. This person is ready for promotion today [measures potential on a yes-or-no basis].”

Improving/Strengthening Performance: In a nutshell, Deloitte’s has seen the value in have frequent one-on-one, weekly, check-ins with the team members. The brief conversations focus on a range of aspects such as weekly goals, reviewing priorities, bringing about course corrections, coaching, or sharing new information. The idea is to provide a clear and current expectation, as well as “what great work looks like”. There is every reason to succeed, in my opinion, when such personal and supportive interest is being shown towards every member of the team on a frequent, scheduled basis. Interestingly enough, it is the team member who initiates the check-in, and this elevates engagement. Deloitte’s system supports the notion that we are interested in our own progress, insights and achievements, so the system is ideal for team members to share the best of themselves and explore opportunities with their Team leader.

I’ve merely skimmed the surface of the process at Deloitte’s and even so, I believe it is apparent that to get the best out of people, you have to treat them with respect and get to know them as individuals in the workplace. Frequent meetings are the key: they are focused, supportive future oriented and dynamic – a far cry from the fossilised performance management systems of the past.