Question

Address the four steps of the Deloitte performance evaluation system.

Answer 1

Deloitte

Deloitte, a global company with 200,000+ employees worldwide, set out to reinvent the way they approach performance reviews after tallying the number of hours the organization spent on performance management: an astounding 2 million hours a year. They also discovered that the current rating system produced data that relied more on the evaluator than it did on the person being evaluated.

In response, Deloitte did a complete overhaul, reframing the reviews to focus more on what the leader would do with each team member moving forward rather than how they would rate them on their past work. They started by identifying new goals for performance management overall.

After conducting focus groups, Deloitte identified three primary purposes for their performance management:

· Recognize performance.

· See it clearly.

· Fuel performance.

1. Recognize performance.

The system should drive annual activities that allow intelligent compensation, promotion, and low-performer management decisions. In short, the data is aggregated, and reviewed quarterly to give business leaders a holistic view of performance in their organizations. Every quarter HR sits down with individual business leaders to review a scatterplot that plots Performance Snapshot results.

They also can see who has been flagged at-risk for low performance, or who has been identified by at least one team leader as ready for promotion. They also look at important business measures per person, like revenue.

They ask their business leaders to integrate all of this data to make their own judgements to drive key talent decisions. See that’s the thing that makes this different from a single summative rating.

In this design, they are trying to bring that nuanced presentation of a person to Talent Management. They know what the local team leaders thought they might do based on what they observed of his performance, and they also know how he has performed against his business metric goals, the activities through which he has contributed to the community, and more. Leaders take all of it into account when making decisions. And the task of the leaders is to make intelligent decisions with it.

So that’s our model. Built on three objectives, with several components, that operate independently, but also reinforce one another to create an ecosystem of performance:

· Team Pulse survey that provides team leaders with insights about the engagement of their teams to drive team conversations around how to increase it

· Low -performer management approach that, due to the timeliness of the Snapshots, generates more real-time attention for those at risk

· Talent reviews in which panels of leaders plan investments in the career development of select talent segments

· Career coach who helps employees discover their strengths, find more ways to play to them, explore performance trends across experiences, and develop their careers.

2. Seeing Performance

· To generate a rich stream of information that gives business leaders a view into the performance of their organizations. Moving away from ratings didn’t mean that it’s stop capturing performance data. It just meant capture a different type of data. They designed several components that enable them to see the performance of their people and teams. Here we focus on Performance Snapshot.

· Fundamentally, a performance management system needs a way to evaluate performance. The Performance Snapshot is a vehicle for the team leader to capture his or her assessment about each team member’s performance, at a moment in time.

· Snapshots are timely, completed at the end of a project, phase, or at least quarterly allowing team leaders to capture their judgement of performance as close as possible to when it occurs. By the end of the year, there are numerous snapshots completed for each person so that the work people do all year is captured.

· Snapshots are research-based. Rather than ask leaders to rate the skills of others, they have crafted questions that ask them to rate their own intended future actions. This approach counteracts the idiosyncratic rater effect, which research has shown distorts ratings because the main variable is the evaluator. Leaders in the new system make decisions based on what they know about a team member’s performance instead of what they think of the person.

· Snapshots are easy. Performance Snapshots use four questions, answered on a Likert-type scale; no more paragraphs to write. They have even given folks mobile access to make these as simple as possible for their on-the-go workforce, to enable an ongoing flow of data throughout the year.

3. Fueling Performance

· The purpose of a system to manage performance should be to create more of it performance. From emerging research, the effective way to drive performance is through conversations. So, they created “check-ins”: frequent, future-focused conversations about the work. Here, team members and team leaders meet 1:1 to explore real-time feedback and expectations for the near-term work. It’s how they align on priorities for what’s coming next, and they do that with a strengths lens. They discuss how the individual will deliver on these priorities given their unique skills and strengths, and how the team leader will create opportunities for them to do that.

· We called them frequent, but we didn’t mandate a frequency. We left this up to business leaders to communicate as they saw fit. Today, the majority of their people are doing them either weekly or biweekly.

They also didn’t require anyone to document anything going into or coming out of a check-in. They didn’t want anything to stand in the way of the conversation.

They stressed that the logistics of check-ins are not as important as making them a habit. The tone, nature and content of a check-in should evolve over time, differing from person to person, engagement to engagement, project phase to project phase, and week to week. There was no heavy training or how-to guides. To launch check-ins they did just two things:

· Gave people prompts to spark conversations.

· Began sending out a simple weekly email with a Yes/No voting button and one question: “Did you have a check-in conversation with your team leader this week?”

They just looked at it on aggregate to understand organization-wide check-in behavior and its impact.
Their people who were used to heavy investments twice per year were now expected to shift that time to the location where the work—the performance—was happening in real time. They changed the notion that performance management is that thing you take time off from the work to do. Currently, check-ins are part of how their people get their work done.

Deloitte created “performance snapshots” that administrators conduct on a frequent basis, normally after every single project or at least once per quarter. Here the facilitators ask team leaders to answer four future-focused statements about each team member:

1. “Given what I know of this person’s performance, and if it were my money, would I award this person the highest possible compensation increase and bonus?” — This question measures an employee’s overall performance and unique value to the organization on a five-point scale from “strongly agree” to “strongly disagree.”

2. “Given what I know of this person’s performance, would I always want him or her on my team?” — This point assesses a staff member’s ability to work well with others, and leaders rate each person on the same five-point scale.

3. “Is this person at risk for low performance?” — This topic identifies problems that might harm the customer or the team, and supervisors report answers on a yes-or-no basis.

4. “Is this person ready for a promotion today?” — This subject measures each employee’s potential with a “yes” or “no” answer.

Deloitte deems this new line of questioning as much more effective because team leaders describe what they would do with each team member in the future rather than what they think of that individual.

The Performance Snapshot is complemented by regular ‘check in’ conversations between managers and staff.
Deloitte steers clear of using the term ‘rating’, citing the fallibility of rating systems – principally those giving ratings. Their own research in this area has undoubtedly influenced Deloitte’s approach.

Goal:

Their aim is to make it as easy for managers as possible to assess performance. A further business driver was to save time and money since their previous approach reportedly saw around two million hours spent on form filling, meetings and arguing back and forth over ratings.

In a survey Deloitte itself conducted, it found that more than half of the executives surveyed did not believe their employee review systems drove employee performance or engagement. And they’re not alone. According to a different survey, six percent of Fortune 500 companies have already replaced traditional annual review performance rankings, and the number is growing.

Deloitte set out a clear goal: “We want to spend more time helping people use their strengths.”

Deloitte was able to recognize the strengths in performance. The concern came with evaluating it. They also now knew that the best insight comes from the immediate team leader, but how can they do provide it without the idiosyncratic effect getting in the way? That's the million (or even a billion) dollar question.

Ideas and insights:

Deloitte has replaced their one-a-year, rating-based performance management processes because it is damaging employee performance and disaffecting the best performers. Follow in their footsteps and create performance management processes that create regular discussions that focus on coaching and development.

Conclusion:

To conclude, Deloitte realized that traditional, once-a-year, 360-reviews were inefficient. They also do not give a transparent view of the current working situation. It is time to reinvent the performance management process.

Employee performance snapshots should be regular and weekly. The technology should be designed to be simple, quick, and above all, engaging to use.