Death to Performance Reviews!

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HR professionals may be rolling the eyes with a sigh.  Controlling managers may slam a fist on the desk.  But cutting annual performance reviews out of the organizational psyche makes a ton of sense.  It makes business sense and, why do something year after year that everyone hates?  Ask Accenture.

In an announcement that sent shivers through the world of “we’ve always done it this way”,  Accenture eliminated the annual performance review.  The act was compared to eliminating a bout with the DMV each year or never again going for the annual teeth cleaning and check up. On the “can this be true?” side, when the review process was eliminated it was like, ding dong, the wicked witch is dead.

As a former Accenture partner I can attest to how the annual review process was viewed.  For those receiving the review, it was viewed as a make-or-break annual assessment that may or may not be accurate and took an enormous amount of time.  For those giving the reviews, it was seen as an annual series of torture-like meetings and sessions with results that may or may not be accurate and took an enormous amount of time.  There was plenty of agreement about the onerous nature of the process and not as much agreement on the actual assessments that were given.  So why continue to do it?  Now we know that Accenture will not continue the process, and good for them.

I wasn’t in on any of the meetings but the list of reasons why Accenture would make such a bold move is probably long.

First, there is a real business reason – do the math.  Accenture has 330,000 employees.  Assume that the time spent on each performance review is one hour (a low estimate) and that two people (the reviewee and the reviewer) are involved.  Next, assume that since Accenture people bill their time and that the billing rate is $100/hour (way low).  Then the annual cost (at the very least) looks something like this formula:

333,000 employees x 2 people in each session = 660,000 hours x billing rate of $100/hour = DO THE MATH.

Second, and more importantly, why continue a practice that no one likes? A practice that is seen as an annual ritual of pain and may or may not be effective. Finally, someone asked the really hard question, “Why are we doing this?”  And the answer was truthful.  So the annual review is dead there.

This is not to say that feedback is not a good thing.  We should all look for some sort of feedback every day.  The best source of feedback is our own inner self.  People generally know how they perform and what should be improved.  Feedback is still critically important.

We should ask others for feedback too but that doesn’t have to be in a formal review situation.  The best feedback is usually in the hallway after a presentation or in the car on the way home from a sales call or after a meeting.  Listen to that feedback and add you own inner analysis and you will be a better performer.

I am proud of Accenture for doing what everyone knows should be done in all organizations.

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