There is an endless cycle of debate over how to do employee performance reviews. Should you set cascading goals; perform reviews yearly, quarterly or on a project basis; assign scores; collect feedback from managers, colleagues or direct-reports?
There is no shortage of opinions out there and they all have ideas for adding complexity to your review process. So when the largest professional services company in the world decides they are going to simplify their reviews, it qualifies as radical.
Today Deloitte has no cascading goals, no 360 reviews, and no scores. Instead their team leaders answer 4 questions after each project (and two are yes/no!).
Deloitte does not make decisions that impact their 200k plus employees lightly. They generate much of the leading research on HR best practices and have an enormous internal team working in performance management, so what led them to pursue a strategy of less rather than more?
Simple Questions Lead to Simple Solutions
Deloitte’s simple performance reviews came from asking two of the simplest questions in business.
- How much does this cost us?
- What do we get in return?
It all started when they decided to count how many hours they spent on their existing review process. The final tally came to almost 2 million hours a year. That is about 8 hours per employee, which is in line with estimates for companies of all sizes.
Then they studied the scores their reviews were generating and realized they told them almost nothing about the quality of theirs employees.
In summary they were running an enormous internal initiative that generated almost nothing useful.
4 Simple Questions
Deloitte focused on solving both the cost and the return side of their performance management problem.
On the return side they reframed the questions team leaders were answering about their direct reports. Their research showed that managers do not evaluate the skills of others very accurately, but they can evaluate their own feelings. So rather than ask a manager whether an employee solves spatial problems at a 3 level or a 4 level, they ask the manager if the they would select the employee for their team again, or if they would do anything in their power to keep the employee at the company.
On the cost side they reduced the number of questions down to just the ones they wanted to answer. Think about it this way, if you want to know whether to try to a new pizza place you could ask 100 questions about the various qualities of the pizza (crust crunch 1-5, sauce tang 1-5, cheese stretch 1-5 etc) or you could just ask people if they plan to go back. In the end you just want to know if you should go, so ask enough people if they plan to go and you’ve got a pretty good answer. Chances are you won’t even be able to get people to fill out your 100 question pizza performance review anyway.
For Deloitte the result was 4 questions they ask team leaders at the end of each project:
- Given what I know of this person’s performance, and if it were my money, I would award this person the highest possible compensation increase and bonus. [5 point scale between strongly agree and strongly disagree]
- Given what I know of this person’s performance, I would always want him or her on my team. [5 point scale between strongly agree and strongly disagree]
- This person is at risk for low performance. [Yes or No]
- This person is ready for promotion today. [Yes or No]
Ask the questions you want answers to, and nothing else. Radical.