7 Companies With The Best Practices for Performance Management

Not that long ago, performance management was all about scheduling, planning, and conducting reviews once a year.

Today, that’s changing.

More than a third of U.S. companies are ditching the annual review, with companies like Microsoft, Adobe, and Deloitte leading the way.

As a result of the changes they have made to their process, these are the companies with the best performance management practices.

You can bet that companies aren’t ditching the annual review for no reason. Each one realized that something wasn’t working, they made a plan to fix it, and they have seen positive impacts on their business after the change.

Listed below are seven companies with the best performance management practices. Each section includes a link to learn more about each company’s performance management system.

Companies with recently improved performance management systems that have recently include:

• Deloitte
• Adobe
• Accenture
• Microsoft
• Netflix
• Google
• Uber

1. Deloitte

In 2015, Deloitte radically revamped their performance management system from the traditional annual review system which, like so many others, had a north star of "accountability" based on past performance.

The big four consulting company now uses a quarterly review system with the overriding goal of coaching and developing its employees. In shifting their focus from past to current and future performance, Deloitte shed a floodlight on one of the biggest intrinsic challenges in employee reviews, striking a balance between development and accountability. In the words of one Deloitte manager, "The conversations are more holistic. They’re about goals and strengths, not just about past performance."

The original process

The original Deloitte performance management process included annual objectives. Managers used evaluations to give employees one rating for the whole year. 

Deloitte conducted a survey to see how managers felt about the process. 58 percent of executives said they didn’t think the performance management approach worked. Managers said it didn’t drive employee engagement or high performance. That’s when Deloitte decided to make some changes.

The change

Deloitte's performance management is one of the simplest out there. The form has only prompts. It takes a lot less time, and managers can conduct performance reviews a lot more often. Managers fill out answers to these four questions after every project or every quarter, depending on which one is more frequent.

The outcome

With this new system, leaders are better able to recognize, see, and fuel performance. The system allows team members to understand and explore their strengths with a self-assessment tool. Not to mention, they save a lot of time. Their previous rating system consumed more than two million hours a year. Their new system without ratings takes a lot less time, but it still enables workers to get feedback more often.

To learn more about Deloitte performance management, click here.

2. Adobe

Adobe is a software company that creates multimedia and creative products, like Photoshop. The company faced an increased pace of updates and innovations in 2012. They soon realized their time-consuming annual review process needed an update. If it weren't for Adobe's fearless approach to performance management, companies like Microsoft and GE might still be stuck in a rigid ratings-based system. The company is credited "killing annual performance reviews," in keeping with the famous “Agile Manifesto” and the idea that annual targets are actually pretty irrelevant to the reality of day-to-day business operations.

In 2012, they introduced the concept of "Regular Performance Check-Ins", an informal system of ongoing, real-time feedback. Under their game-changing system, there are no deadlines and no forms to fill out and submit to HR. Managers decide how and when to set goals and give feedback. In removing the red tape from the performance appraisal process, Adobe allows teams to act more independently and more quickly in response to changes in the business and market. Since implementing their agile approach, the company has seen a 30% decrease in voluntary turnover and a 50% increase in involuntary departures.

The original process

The original Adobe performance management process was labor-intensive and time-consuming. Each employee had to provide feedback to several people. Managers wrote a performance summary as well. In all, employees spent 80,000 working hours a year on reviews. Plus, some employees received critical feedback that they weren't expecting.

The change

Adobe switched to a Check-in system where managers meet with employees every quarter, or more often. Managers outline expectations with each employee, but no formal or specific format is needed.

The outcome

Donna Morris was the Senior Vice President for Customer and Employee Experience at the time. She said, "70% to 80% of employees are aligned on expectations, receive regular feedback regarding their development, and feel that their managers are open to feedback as well."

Adobe has continued to climb the ranks of Interbrand Top Global Brands. Now, eight out of ten new hires discuss the Check-In process as a key tenet of Adobe culture.

To learn more about Adobe performance management, click here.

3. Accenture

Accenture is a professional services company that helps organizations optimize operations. They felt that their original performance management process was slowing everybody down. It was not helping employees perform their best. Accenture began the process of changing how they do performance management in 2015.

Like Deloitte, Accenture is a giant in the consulting world. The management advisory firm is also a regular on Fortune's best companies to work for rankings. And like Deloitte, Accenture moved away from a rigid performance management system, shifting from evaluation to development. It was again, a massive undertaking, “Imagine, for a company of 330,000 people, changing the performance management process — it's huge,” said Pierre Nanterme, CEO of Accenture in a 2015 interview with The Washington Post. “We're going to get rid of probably 90% of what we did in the past.”

While Accenture's approach looks very similar to that of Deloitte and others, the company's PM strategy has one clear differentiator — employees work with managers to set goals for themselves. At first glance, it can be tempting to view this as just another thinly veiled approach to rank and yank, but for Accenture, this focus on individuality is fundamental to coaching employees to "know thyself" and encourages a greater sense of passion and dedication at work.

The original process

The old approach ranked employee performance on a bell curve, with only so many "top performers". They attempted to adjust the process by identifying objectives and goals for each employee. As the list expanded to 20, they realized the process was more of a hindrance than a help.

The change

Adobe scrapped the annual review. Now, they conduct more frequent reviews that focus on providing real-time feedback. As then-CEO Pierre Nanterme explained, "People want to know on an ongoing basis, am I doing right? Am I moving in the right direction? Do you think I’m progressing? Nobody’s going to wait for an annual cycle to get that feedback. It’s all about instant performance management.”

They scrapped the bell curve and cumbersome objectives to measure employees on a more accurate, individual basis.

The outcome

With the help of technology, feedback can be shared on a continuous basis. This makes their new system much more agile and immediate than the old one. The system focuses on the individual instead of the group. Now, employees receive specific feedback they can use to improve. They no longer feel demoralized by being ranked against other employees.

To learn more about Accenture performance management, click here.

4. Microsoft

As one of the biggest companies in the world, Microsoft is expected to dominate performance management. Unfortunately, it became clear in the early 2010s that Microsoft’s system of annual reviews wasn't working. They set out to create a more effective, less time-consuming review process. It's one thing when a millennial-run tech startup bucks an ongoing HR trend — it's a whole other thing completely when a giant like Microsoft does it.

In 2013, the software giant was under increasing heat from former employees to eliminate its cutthroat stack ranking system, prompting Microsoft to become one of the first big-name brands to ditch employee ranking. Instead of sticking to forced timelines and rating curves, Microsoft created a performance management process called “Connects”. Similar to PD@GE, Microsoft optimizes their workflows to accommodate for timely feedback based on the rhythm of each part of their business — rather than following one timeline for the entire company.

While there is definitely an element of collaboration and development in Microsoft's new system, the real goal is to eliminate the many silos that exist in a company their size and foster a better sense of teamwork in order to act more quickly on changes in the market and avoid becoming the proverbial business Titanic. "The changes we are making are important and necessary as we work to deliver innovation and value to customers through more connected engagement across the company," said former EVP of HR, Lisa Brummel.

The original process

Annual reviews were becoming another thing management had to check off their to-do list. Employees were doing whatever they could to get through the meeting. They were then returned to their roles without internalizing any of the information given during the review.

Feedback was too general, one-sided, and too formal. Microsoft realized its performance management process should focus on the employee's future.

The change

Microsoft's new process includes setting goals and conducting flexible performance reviews.

It also includes the use of performance journals that employees use to send and collect feedback on the performance of others, as well as their own. It is a tool to support employee performance, with no expectation for it to be shared during performance reviews.

A nimble platform is used by employees that enables everyone to manage and track goals. However, goals are not required ahead of a performance review. That way reviews can be conducted frequently and at a time that's convenient for management and employees.

The outcome

Microsoft uses a stacked system of reviews with check-ins, semi-annual, and annual reviews. As a result, employees are better able to understand and exhibit the values of the company. Employees also gain clarity on their performance and how they can improve.

In addition, the stress of being rated is gone, so employees are more focused on genuine growth rather than hitting an arbitrary number on a scale.

To learn more about Microsoft performance management, click here.

5. Netflix

At one time, Netflix struggled to build its dream team of employees. Patty McCord and Reed Hasting made a PowerPoint deck about how to motivate performance at Netflix moving forward. It would end up influencing many other businesses to do the same.

The original process

Netflix was facing a few challenges, one of which was the delayed feedback that is associated with annual reviews. They also had a vision of creating a "dream team" of employees. These employees would demonstrate company values. They would think independently and make decisions on their own. The annual performance review just wasn’t cutting it.

The change

Netflix started by scrapping the annual review. Instead, they used a 360-degree review process. Employees learned from colleagues what they do well and what needs improvement. Netflix conducts these reviews frequently and informally. Employees can receive timely feedback that they can act on quickly.

Other changes were made too. Reviews evolved from being anonymous to face-to-face with the belief that employees deserve to be told the truth.

They also support the autonomy of employees. Patty McCord said, “The best managers figure out how to get great outcomes by setting the appropriate context, rather than by trying to control their people."

The outcome

Due to these changes, Netflix has been able to retain prime talent and achieve a high-performance culture. That said, Netflix’s approach of talking simply and honestly about performance does have some drawbacks.

Managers are encouraged to build their perfect team, and many employees admit that being fired is always a thought in the back of their minds. The competitive environment can also make it difficult to achieve a work-life balance.

To learn more about Netflix performance management, click here.

6. Google

Google regularly ranks highly as one of the world’s best places to work. That’s in part thanks to their ever-evolving performance management process. 

The original process

As many traditional performance review processes do, they put the power in the hands of management. Google’s previous review format focused on the feedback itself and not the person receiving the feedback. Google wanted to be a leader in company culture and performance management, so it needed a change.

The change

Google has been progressive in putting workers first with its "People Operations Practice." Laszlo Bock, Google's former Senior Vice President of People Operations, said, "All it takes is a belief that people are fundamentally good—and enough courage to treat your people like owners instead of machines."

The new process is ever-evolving and includes different aspects from different types of review styles. For example, they were using a two-part performance review, but they have recently dropped the mid-year review. Now they only conduct an end-of-the-year review. Their review process also includes self-assessment, 360-degree feedback, and monthly check-ins. Timely feedback is still prioritized.

The outcome

The outcome is that employees have more control over the process and their role in the company. In a survey, nearly half of Google employees reported that twice-annual reviews were not time well-spent. That’s why they were scrapped recently. Google can retain top talent because employees are put first. The company has a strong merit-based incentive program. It encourages everyone to reach their fullest potential.

To learn more about Google performance management, click here.

7. Uber

Uber is a unique example because they have two groups of employees to manage. They have to maintain a review process for drivers, as well as their full-time employees. They have managed to do both well with immediate feedback for drivers and a new process that focuses on employees.

The original process

The previous system for internal employees included the use of standard ranks and ratings. This process was top-heavy, with managers wielding all the power, while employees were left feeling powerless.

The system forced employees and their managers to spend more time focusing on past behavior than future possibilities. Also, managers were leaning into their biases. The subjective process and minimal feedback resulted in a simple score. This score provided no value to employees.

The change

Instead, Uber created a new strategy that they call the "T3 B3 process." It asks employees to list their top three strengths and three areas where they can improve. Goals are created based on this information, which comes directly from the employee and not managers.

Managers are still allowed to share positive reinforcement and constructive advice, but they check their feedback ratios to make sure each type of feedback is balanced.

The outcome

The changes have had a positive impact on the company. Employees say things like "the culture at Uber is excellent." They say it has a "fast-paced environment and very low-stress levels." Celebrating people has allowed Uber to foster a collaborative atmosphere with constructive feedback.

To learn more about Uber performance management, including how their system impacts drivers, click here.

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Trends Shaping Performance Management in 2025

Performance management isn’t something you’re supposed to set and forget. It’s supposed to be an ever-evolving process as you figure out what works for your organization, and what doesn’t.

But, figuring out what needs to change can be hard, especially when you settle into a routine and your employees know what to expect. It can help to see how other companies are tackling modern performance management if you’re ready for a change to your system.

Many of the companies we have featured on our blog have changed things over the years. The biggest companies seem to be leading the way in performance management trends.

Here are the top performance management trends of 2023. Many of these trends show up at big-name companies that pay attention to their performance management process.

Custom Performance Management Processes

Google has always been progressive when it comes to its performance management system. Their previous system featured things like 360-degree feedback, check-ins, and annual surveys. They have always focused on supporting employees to reach their fullest potential, but they have taken that support to a whole new level.

Google has more recently developed a program they call Googler Reviews and Development (GRAD). This program focuses on creating a customized process for employees to help them do the best work of their careers. Google built the system instead of relying on an out-of-the-box system designed with another organization in mind.

The GRAD system includes:

• The continuation of frequent check-ins and feedback, but with a slight change. At least one of the check-ins will focus on learning and career development.
• Their existing merit-based incentive program has new opportunities. These include bi-annual promotions with a focus on internal mobility.
• A new rating scale that reflects the fact that most employees at Google are high performers and need to know more than whether they’re on track or not.

You can follow this performance management trend at your own company by thinking outside the box. Don’t be afraid to tweak your system, even if your idea has never happened before. In 2023 and beyond, it’s all about customizing your performance management process for you and your employees.

More Transparency

Many companies have been incorporating 360-degree reviews into their performance management process. It has been part of Netflix's process too, but over the years, the process has become more transparent.

At first, they conducted anonymous 360-degree reviews. Now, the company focuses on face-to-face feedback.

This highlights one performance management trend. Companies are offering more transparency throughout the feedback process.

At first, they conducted anonymous 360-degree reviews. Now, feedback happens face-to-face.

That means transparency from employees, but it also means transparency from those at the top. A performance management system that prioritizes transparency invites more meaningful conversations. These conversations focus on performance, growth, and expectations. They also build trust. Employees in high-trust environments are 75% more engaged than their peers who work in low-trust workplaces.

When integrating more transparency in your process, take a page from Netflix’s playbook and do it slowly. The concept of full transparency can be scary for employees who aren’t used to it. Steady increases in transparency get everyone on board without overwhelming them.

Engagement First, Ratings and Measurements Second

The Deloitte method of asking four simple questions on their review form was revolutionary. They were revolutionary because managers already knew the answers to the questions. It was a way to spend less time gathering more information. They can measure this information over time and use it for promotion and compensation decisions.

That said, these structured reviews aren't the only way they do performance management at Deloitte. They give team leaders the ability to manage their teams, and in 2023, engagement is becoming more and more important.

Companies and workers are working together to face challenges and define a boundaryless world. To do that, they need constant employee engagement. Conversations are now about qualitative topics instead of quantitative ones. This ensures teams take a big-picture view of goals, professional development, and performance.

That doesn’t mean ratings and measurements aren’t important. They are, but the focus is on making sure employees engage with the performance management process.

How that materializes at your organization will depend on your unique needs. Customizing a process that works for you is a performance management trend too. That means finding unique ways to invite feedback and encourage dialog among employees and managers.

More Relaxed, More Flexible Process

Annual performance reviews have been the gold standard for decades, but the process is extremely rigid. It can take a long time, it's usually uncomfortably formal, and the process is almost always one-sided.

Microsoft wanted to break away from the rigid, structured nature of annual reviews. They wanted to focus on the future rather than the past performance of employees. 

The modern Microsoft performance management process utilizes a journal for each employee. This journal includes the performance review and goals. With the journal, both employees and managers can create and share their versions.

What makes this process so unique is the fact that they don’t have to fill out all the components of their journal ahead of a performance review. Managers and employees can meet, even if they haven't set up new goals, or scheduled a formal performance review.

If you like the idea of flexible reviews, relax your requirements ahead of check-ins and reviews. Give employees and managers the tools they need to conduct successful meetings. You should also give them the freedom to decide what they need ahead of those meetings.

Bonus: Examples of Companies with Clear Performance Management Goals

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Cultural Alignment at The Stanley Clark School

Ok, enough with the Fortune 500 examples. The best inspiration doesn't always come from the biggest names. Take The Stanley Clark School for example. This independent, private school serving children from preschool to eighth grade in South Bend, Indiana shows how a clear performance goal can help you punch above your weight. Schools across the US are plagued with toxic working environments, which undoubtedly has a negative impact on students. In her guest post for Gibson, Melissa Grubb, Head of School at The Stanley Clark School explains how they set their unique goal for a performance system and culture to rise above.

"First , a word about the assumption made as we embarked on creating a new process. We assumed each employee is competent and that the process should support our expectation of continuous improvement. Our interview process lasts for days in most cases and, if we make a hiring mistake, we correct it as soon as possible regardless of the evaluation cycle. We assume the process is designed for the employees we wish to keep, not the occasional bad fit."

Because they removed the accountability factor from the process completely, Melissa and her team can firmly focus on developing the employee within the context of the school's unique cultural values. Employees are given 6 questions and 30 positive statements to review before each performance-related meeting in order to help spark a productive conversation about their performance and how it fits into the greater whole.

Democratic Accountability at Valve

In case you haven't heard of Valve, they're the billion-dollar company behind some of the world's most popular video games. With no hierarchy, no set performance metrics and no seating chart, Valve's unique company culture (referred to as "Flatland") is designed to get maximum creativity out of its employees. So what purpose does its performance management process serve?

For a company so "out there", Valve uses performance appraisals in surprisingly traditional sense. The company creates a team of employees who then conducts performance interviews with each individual in the company, asking them who they worked with and what their experiences were working with that person. They then anonymize the feedback and present it to employees in what is a fairly typical 360 review system. When performance issues arise, they work with the individual to try to find a solution. If firing is the consensus, they make an attractive severance offer and attempt to part on amicable terms. For Valve, using their PM process to enforce accountability at the group level is a great way to loosen the reins in the day-to-day.

Growth at Gap Inc.

Gap is another company considered an early innovator in the world of performance appraisals. The company has a firm commitment around maintaining a growth mindset — the belief that everyone can be learn from their success and failures. While traditional performance management almost always begins with a lofty, passionately-worded goal, the high street retailer focuses on short-term quarterly goals supported by real time feedback, regular check-in and annual “GPS” (Grow, Perform, Succeed) meetings.

At Gap, there's no annual review and no ratings. By coupling short-term goals with individual accountability, the retailer puts growth front and center in their performance management strategy.

Autonomy at Asana

Tech startup Asana doubles down on the idea of aligning values with performance expectations in their famous AOR (Areas of Responsibility) framework. Instead of a traditional hierarchy, managers (a.k.a. "AOR-holders") trust their people to make the best decisions for the business.

And their performance management system is a clear reflection of their culture. Instead of annual or quarterly reviews, Asana gives face-to-face feedback often, and with zero paper trail. The company has a self-review at the end of each year, in addition to a biannual review of the company’s general direction where teams take weeks out of the office to discuss goals and performance-related issues and hold regular feedback sessions with peers and managers in a closed retreat-like setting (not unlike Microsoft's famous Think Weeks).

The focus on autonomy and objectivity are upheld through regular one-on-ones where AOR-holders and leaders ask personal development questions like, "What are you feeling?" and "What are your long-term human aspirations?". It may sound a little woo woo for those of us who have been in the game since the pre-Facebook days, but with over 20K+ paying customers and plans to go global, the company seems to be onto something.

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Need some tips on how to improve your company's performance management process? Check out our latest video:

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Focused on the Future

There isn’t a lot we know about Apple’s performance management process. We know they use 360 reviews and cascading goals, and now we know it also includes a focus on the future.

With help from three or four different executives, employees can dig into their strengths and weaknesses. The goal is to understand and improve the areas where they excel and where they are falling short to discover how they can be more productive.

There is also a focus on results—not effort. During the review process, management and employees talk about what they’ve done. They also talk about what they can do in the future.

Create a review process that doesn’t get hung up on past performance. Instead, use past performance to support the future performance of employees.

Looking for more performance management trends from top companies? Check out some of PerformYard's articles that include:

• GE performance management features an app called PD@GE. It supports more frequent, meaningful conversations between managers and employees.
• Facebook utilizes real-time feedback. It helps employees and managers understand performance ahead of an appraisal. This minimizes uncertainty and ambiguity.
• Asana invests in employee growth. They treat managers like coaches and empower employees to make their own professional decisions in the future.
• Things change fast at Tesla. The Tesla360 summary survey gave way to more traditional annual reviews in the name of a more streamlined, lean approach.
• Uber has one system of reviews for its drivers and a separate system for regular employees. The system for full-time employees involves positive reinforcement and constructive advice.

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What Do These Companies Have in Common?

Let’s step back from focusing on how a single company does performance management. It can be helpful to take a big-picture look at all the companies with the best performance management practices. By uncovering what they all have in common, you can craft a performance management system that’s right for your company.

All the companies listed above have fairly flexible performance management systems . They  expand and contract with the needs of the business. Google's recent drop in their mid-year performance review and Adobe's system of Check-ins illustrate this point well.

These flexible systems also enable each of the companies on this list to tailor their process to their unique needs. These companies don't have to conforming to a straight-out-of-the-box approach.

Whether the company does annual reviews or not, they all feature a system of check-ins that enable employers to receive feedback on time. Employees don't have to wait until a formal annual review to get feedback. The ultimate goal is that employees, managers, and the company highlight future possibilities instead of dwelling on past performance.