Accenture to overhaul annual performance review cycle

08 September 2015 Consultancy.uk

Accenture will replace its old bell-curve form of performance review by a more people friendly form of assessment. The consulting firm cites that the traditional performance review itself has been shown to be underperforming. It often selects narcissistic characteristics, disengages even those positively reviewed, and is seen as a bane by managers and HR professionals alike. Accenture’s move sees them joining other early adopters of change in the qualitative and quantitative assessment of staff.

Accenture, one of the world’s larger employers with more than 330,000 employees, recently announced a shakeup to the way it evaluates its staff. Traditionally, like many of its rivals, Accenture uses a bell curve evaluation system to determine and rank the performance of its employees.

Bell curve
The approach ensures that the performance of employees is relative and comparable, whereby only a certain % of the population (‘top performers’) gain top notch scores and, at the other end of the tail, a similar % of the professionals is rated as underperforming. The overlarge majority of the population sits around the mean performance level. The bell curve approach has large implications for the wallets of accountants and consultants, as both pay and bonus are typically linked to scores.

Bell curve

From September onwards, a bell-curved way of ranking its staff will be a thing of the past. Resulting in, what Accenture CEO Pierre Nanterme states to The Washington Post, a “massive revolution”; by the ditching of the annual performance review, the consulting firm is “… going to get rid of probably 90% of what we did in the past.”

Reasoned change
The reason for the change is multifaceted. The company’s own research and outside studies show that performance reviews take time, cost money and often do not even perform themselves. One problem with the bell curve is that it has the tendency to select those good at performance reviews, which can be those with narcissistic traits. “Employees that do best in performance management systems tend to be the employees that are the most narcissistic and self-promoting,” explains Brian Kropp, the HR Practice Leader for CEB. “Those aren’t necessarily the employees you need to be the best organisation going forward.”

That the current system is flawed is not necessarily news to many managers. A CEB study finds that 95% of managers are not satisfied with their firm’s method for enacting reviews, with 90% of HR leaders too weary of the technique – citing that it often does not provide accurate information.

Review

Performance reviews also have a way of negatively affecting those reviewed, even if their outcome is positive. According to a Brain study, reviews tend to trigger disengagements and constrict openness for creativity and growth.

Besides not being accurate, selecting narcissistic personality types and negatively affecting employees, the review takes up a considerable amount of time. Managers spend up to 200 hours per year dealing with the review process, from getting training on the latest techniques to filling out forms and delivering them to staff. As a result, the cost of the process for a firm with 10,000 employees is estimated to be around $35 million per year. “The process is too heavy, too costly for the outcome,” remarks Nanterme. “And the outcome is not great.”

A new approach
Instead of performance reviews, Accenture will implement a system by which employees after assignments are provided with timely feedback from managers. “All this terminology of rankings— forcing rankings along some distribution curve or whatever—we’re done with that,” Nanterme elaborates on Accenture’s decision. “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. It’s irrelevant. It should be about you.”

Pierre Nanterme - Accenture

The aim of the new approach is to support employees to perform their position better in the future. “The art of leadership is not to spend your time measuring, evaluating,” explains Nanterme. “It’s all about selecting the person. And if you believe you selected the right person, then you give that person the freedom, the authority, the delegation to innovate and to lead with some very simple measure.”

Sea change
It is not merely Accenture exploring this way of transforming their managers’ engagement with subalterns. KPMG recently experimented with a change of assessment in India, while Deloitte also announced it was piloting a new scheme – whereby performance reviews consist of four relatively simple questions.

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