The shift from annual performance reviews to ongoing feedback

In an inspired decision brought one by the new generations shaping the workplace, Accenture has decided to forego the obsolete annual performance reviews for all its 330,000 employees. Millennials or Gen Y, standard-breakers of employee practices, are performance-driven by nature. They want to learn and they want to be trained. They are driven by a constant need to improve themselves and acquire new skills that power their innovative thinking and solution-oriented actions.

This type of mindset can only thrive in a culture of ongoing feedback. Fast-development and constructive disruption cannot occur with a once-a-year formality that cannot accurately pin-point improvements and learning objectives to be set.

According to Washington Post, the company will disband rankings and the once-a-year evaluation process starting in fiscal year 2016 (September this year), in favor of a more fluid system, in which employees receive timely feedback from their managers on an ongoing basis following assignments.

“The art of leadership is not to spend your time measuring, evaluating. (…)It’s all about selecting the person. And if you believe you selected the right person, then you give that person the freedom, the authority, the delegation to innovate and to lead with some very simple measure.”

Pierre Nanterme, CEO of Accenture via The Washington Post

But Accenture is not the only company to realize the futility of annual performance reviews; Deloitte has also started a pilot program that focuses on constant feedback and uses four simple questions in its frequent reviews. Other big companies pushing this trend forward are Microsoft, Adobe, Gap and Medtronic.

In the UK,  top performing employers are moving towards more transparent goal setting and more regular feedback as part of simpler and less formal performance reviewing. In the Performance Management Study by the Top Employers Institute, 96% of the UK companies that qualify for the Top Employers status are now consistently re-aligning performance goals during the year in response to changing business needs, and 84% evaluate the performance of their employees on a continuous basis. (Source)

Moreover, according to a recent infographic published by, 58% of managers find employee performance reviews to be an ineffective use of time; it is one their most dreaded responsibilities, second only to firing an employee.

“A key finding of our study is that Performance Management evolves from an annual event with rigid objectives to a transparent process of continuous dialogue, with flexible goals, that is more embedded in day-to-day operations so it can better deal with change. Companies that become Top Employers redefine performance as the ability to collaborate and contribute to the success of a team.”

David Plink, CEO of the Top Employers Institute via The Online Recruitment Resource

So what’s the alternative? Companies are trying to come up with different ideas, from project-based reviews, to using simpler performance indicators, to continuous appraisal and performance coaching.

“The big idea is that what you want to do is you want to look for ways to make inside an organisation as rich in feedback as life is outside of organisations.”

Daniel Pink via SmartCompany

What do you think the alternative should be?

Image credit: Sebastiaan ter Burg under C.C.2.0