Joining a group that already includes Adobe, Microsoft, and Deloitte, consulting firm Accenture will end performance reviews and rankings for its 330,000 employee starting this September, according to the Washington Post. It’s one of the largest companies by headcount to do so.
The annual performance review has long felt like an immovable fixture of the corporate world. The process and results can feel rigorous, and provide a legally helpful record when it comes to termination lawsuits. But in addition to the stress they put on both sides and their intensely bureaucratic nature, they’re rife with bias (people tend to give excessively high ratings), and ranking people can easily backfire and demotivate huge chunks of a workforce.
Management theorists argue that they’re intimidating and promote bad management. Putting so much emphasis on a once a year process tends to focus all goal setting and feedback to one point, discouraging the sorts of frequent conversations and updates that truly improve performance. Without a real opportunity to course correct, people end up blindsided by negative feedback.
Accenture will seek to avoid such situations by emphasizing timely feedback on assignments over focusing everything on one meeting.
“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, “Accenture CEO Pierre Nanterme told The Washington Post. “It’s irrelevant. It should be about you.”
The vast majority of companies still have annual reviews, along with some kind of rating system. It’s heavily entrenched, and is the only way many HR departments and managers know how to manage performance. But as more and larger companies show that they can rubbish the review without the sky falling down, more may follow.