By David Rock and Beth Jones
The move away from conventional, ratings-based performance management continues to gain momentum. By November this year, at least 52 large companies had shifted from the practice of once-yearly performance appraisals; estimates are that hundreds of other companies are considering following suit. A wide range of industries are represented, from technology (39% of the 52) to business services (19%).
At the NeuroLeadership Institute, we’ve conducted in-depth research with 33 of these 52 companies to find out what really happens when companies remove performance ratings. Here are some of our high-level findings:
1. The frequency of manager-employee conversations increases dramatically.
All of the companies increased the recommended number of manager interactions with their teams. Of the 33 U.S.-based companies we studied, 76% had previously recommended an annual performance conversation. After moving away from ratings, 68% moved to a recommendation of, at minimum, quarterly conversations.
The focus has clearly shifted to conversations happening throughout the year. Managers are being urged to use their judgment about a conversation frequency that best supports employee performance. Some companies are also asking direct reports to play a more proactive role in owning the responsibility for scheduling and preparing for performance conversations. Continue reading