Setting the Bar on Performance Ratings

by M. Anthony Sacco of Stratalyne

What could and in many cases is going wrong with performance rating and how is it affecting talent engagement?

We know that annual performance ratings (reviews) are not doing the job to provide engagement and alignment to strategic goals. We know that annual performance reviews lack overall clarity and tend to be biased toward their timing when rating decisions are made. We know that those rating performance are not well versed in method or process but we rely upon their opinions for critical talent analysis. And I would say we know we need something better.

In the April, 2015 issue of Harvard Business Review, the cover article, “Reinventing Performance Rankings, A radical new way to evaluate talent” (Buckingham & Goodall, p 40-50) discusses the performance appraisal conundrum and provides an example of a better way.  The system they describe is one developed by Deloitte with the goals of being nimbler, real-time, and more individualized in order to create outcomes that enhance engagement and performance.  In addition, Deloitte had taken a look at the system they had, using objectivity built upon the available data,  and found that the cost of their system amounted to two million hours of meetings, forms completion, and ratings preparation.  First of all, if they were going to spend this much they wanted better results and secondly they wanted to know if it was really necessary to spend this much on a successful performance management system.

The system Deloitte created was one specific to their needs in that it was tied directly to the project based nature of their services.  But, as I see it, more relevant for this article is that they focused their attention on creating a system that provided the 1. right information for compensation decisions, 2. a high level of clarity in the resulting information, and 3. that supported performance improvement.  This three pronged approach meant that they would identify the most knowledgeable rater (not raters) and ask that rater to explain the value of the rated employee in a personalized, future oriented thought process.  Through this approach they developed a more aligned, effective, efficient evaluation program with more valuable feedback into the talent management process.

What do you think?  Could you do better with your performance review and talent management program?  I would bet most of our readers would answer “yes”.

Stratalyne Business Solutions LLC provides services to improve talent and performance management.

Other resources:

Article on Performance Management published by SHRM (2004)

© 2015 Stratalyne Business Solutions LLC

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