Woo-Hoo! Companies Junk Performance Reviews

Photo (cc) by herval

Accenture employees are breathing a sigh of relief.

The global consulting firm, one of the largest companies in the world, recently announced it’s ditching its annual employee performance reviews, The Washington Post reports.

“Imagine, for a company of 330,000 people, changing the performance management process — it’s huge,” Accenture CEO Pierre Nanterme told the Post. “We’re going to get rid of probably 90 percent of what we did in the past.”

Accenture is joining a small, but growing, list of companies, including Adobe, Gap, Microsoft and Deloitte, in banning employee performance reviews. The time-consuming paperwork and forced review rankings was a headache for both managers and workers, the Post said.

Accenture plans to implement a new system where managers provide employees with ongoing, timely feedback throughout the year.

The cost of performance evaluations, both from a financial and psychological standpoint, far outweighs the benefits, The New Yorker writes. The process has been the subject of complaints from employees and managers for several decades.

Research has bolstered their complaints. The New Yorker said a 2013 study on how people react to negative feedback, like that received in performance evaluations, found the following:

The researchers figured that people who seek out learning opportunities would react better than those who avoid situations in which they might fail. This was true—but even the avid learners disliked performance reviews, they just disliked them less.

The research could also be summed up like this: pretty much everyone hates performance reviews.

Kevin Murphy, a scientist at Colorado State University and a performance appraisal expert, described some issues with performance reviews in an email to The New Yorker:

Managers have incentives to inflate appraisals; even accurate feedback can feel biased and unfair, making people less motivated and hurting relationships between supervisors and subordinates; and organizations don’t do a good job of rewarding good evaluators and sanctioning bad ones. “As a result, annual appraisals end up as a source of anxiety and annoyance rather than a source of useful information,” Murphy wrote.

According to the Post, 6 percent of Fortune 500 companies have scrapped employee rankings based on evidence that the time, money and effort involved in the review “didn’t ultimately accomplish their main goal – to drive better performance among employees.”

The companies that banned performance reviews are transitioning to new evaluation processes.

“All this terminology of rankings — forcing rankings along some distribution curve or whatever — we’re done with that,” Nanterme told the Post of Accenture’s decision to ditch performance reviews. “We’re going to evaluate you in your role, not vis à vis someone else who might work in Washington, who might work in Bangalore. It’s irrelevant. It should be about you.”

I’ve only had a few performance reviews in my working life. Though the comments I received were generally positive, I hated them. I didn’t like the numerical ranking system, and I certainly don’t think they improved my work.

Do you have performance reviews and rankings at your job? Share your experiences below or on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

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