Performance management given overhaul by Deloitte

‘Millennials find it very stale, bureaucratic, administrative’

It can be hard to find an HR professional who is completely happy with his organization’s performance management system — probably because employees dread the process and, quite often, so do managers. 

Deloitte is no stranger to the issue. And since the company was having problems with its performance management, it smashed the system and completely reinvented it. 

The company, which has 8,135 employees in Canada, researched the issue, reinvented it and then shared its insights at a recent Toronto event. 

The arrival of millennials in the workplace has really reshaped a lot of different aspects of the workplace, performance management included, said Patricia Salverda, associate partner, national talent and consulting, at Deloitte in Toronto.

“Our millennials have communicated very clearly to us that they’re not happy with how we operate our performance management system. They find it very stale, very bureaucratic, very administrative, and really not what they’re looking for which is all about coaching and development,” she said. 

“Millennials in our organization represent 49 per cent of our Canadian practice… so there are a lot of people who want to see change, and we need to respond to it in order to provide them with an environment that (will retain them).”

In sending out engagement surveys and constantly doing focus groups, Deloitte received valuable, constructive feedback from employees, said Salverda.

“They can’t see the link from performance to career aspirations, they don’t understand why it has to be done twice a year,” she said, adding the company was spending way too much time on all the wrong things. 

Employees — and millennials in particular — found the performance management system impersonal and disengaging, she said. 

“(They said), ‘You’re not talking to me — you’re talking about me. And I want you to talk to me,’” said Salverda. 

That feedback really resonated and made it sound like a huge cultural change was in order instead of just a systems change, she said. 

“Right now, they don’t feel like they have any power over the rating that they get — it feels bureaucratic to them.” 

Time for a redesign
The new performance management design will launch in early September, said Salverda, and it will use technology to provide real-time data to leaders.

“What performance management should really be about is understanding our people… and recognizing and rewarding our folks,” she said. 

But to redesign the system, Deloitte threw away everything it knew or thought it knew about performance management, which allowed the company to start fresh and ask, “What do we really want this experience to be like?” said Amanda Mackenzie, associate director, talent experience at Deloitte in Toronto.  

“We tried very deliberately to speak in terms of an experience because it is meant to be, day-to-day, very personal,” she said. 
“We’ve really sort of broken this down under the general guidance of we wanted to fuel performance, we wanted to see performance and ultimately recognize performance. So recognizing those overall objectives, it was really about how management could enable those objectives to come to life. So with respect to the opportunity to fuel performance, this was all about: How do you continue to keep great people great?”

Traditional performance management seems to assume that people have problems, that they are not doing things well, said Mackenzie. 

“As practitioners, as individuals, I don’t think any of us feel that way. We’re all doing our best, we’re working hard, we deliver great results. So it was really about recognizing ‘Let’s challenge that assumption and acknowledge that we have great people who do great work,’” she said. 

The new system
The first and most fundamental part of the experience is a tool Deloitte calls “check-ins,” said Mackenzie.  

“There’s no technology involved whatsoever — many of our great leaders are already doing this naturally. And this is essentially where you have team leaders meet with their team members, those individuals for whom they have responsibility, to meet on a weekly or at most bi-weekly basis. And the focus of those conversation is essentially ‘How are you doing, what do you need from me as a leader and how are things going?’” she said. 

“It’s about a conversation — it’s not about rigorous documentation. As a team member, you don’t go anywhere and type what you did in your check-in… it’s about ensuring that conversations are happening at that level of frequency.”

Goal-setting used to take place on an annual basis, and it was revisited once a year while people were assessed against it, she said. But organizational roles are changing dynamically. 

“The fact that we only do this once a year… is ridiculous. So check-ins are about ‘What are your goals for this week?’ It’s very future-focused,” said Mackenzie. 

“It’s about creating opportunity for team leaders to give people relevant feedback.” 

With this level of connection, team leaders are able to troubleshoot or course-correct before issues go way out of control, said Mackenzie. Also, from a feedback perspective, it’s a lot easier to give someone feedback when he’s been off course for a couple of days than when he’s been off course for six months or a year. 

“Some of those things that we hesitate to deal with in performance management around issues or difficult feedback are actually being offset by the fact that you’re talking about this regularly and with this degree of clarity. So it’s a hugely important, fundamental part of the experience that probably doesn’t sound overly revolutionary to you, but really is acting as a game-changer for us already,” she said. 

The second key piece of the new system is each employee has a career coach, said Mackenzie. 

Team leaders are constantly changing and there are a lot of moving pieces within the organization, so they need one central person who is going to bring the whole story together for the individual team member, she said. So everyone has an individual, designated career coach. 

“That is that one static person who is your go-to person, who can help you with overall, long-term planning, goal-setting from a career perspective… have very specific conversations to help them be successful in their day-to-day roles, but also act as a resource in terms of overall guidance and leadership,” she said. 

A third key piece is the concept of “pulse” surveys. 

“This allows team leaders to initiate a survey within the team,” said Mackenzie. “Team leaders can initiate these surveys at any time within the team, the only restriction is that you need a team of three or more.

“Team leaders can do this for example at the beginning of a project, mid-way through a project, and at the end of a project.”

The pulse surveys are intentionally positioned as non evaluative tools. They are tools for the team leader to facilitate conversations with the team members about the kind of environment they want to be a part of. It requires the team members to take ownership of the results, said Mackenzie. 

If, for example, someone answers “neither agree nor disagree,” she needs to own that feedback with context in the debrief. 
Team members are all collectively creating the assessment, she said, “so you have a shared ownership of what kind of team you want to be part of.”

Deloitte will also use a performance snapshot to replace what it would have done before as a performance evaluation. It’s a four-question survey that really reposition what’s being asked of team leaders, said Mackenzie. 

“Previously, we were asking people to rate other people based on skills and behaviours. Whenever you ask someone to rate someone else’s behaviour, your actual results are determined by your own biases,” she said. “The ratings that we’re giving people are so fundamentally flawed by this effect.”

Deloitte wanted to remove that from the equation, so it changed the focus to what the person actually does, not whether he was good at x or good at y. 

“What we now have are insights… that are really focused on the individual.”

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