Why More and More Companies are Ditching the “Old” and Ushering in the “New”
You don’t have to flip far through the Business pages these days to find yet another report of a Fortune 500 Company dumping its outdated performance assessment structure.
Take the example of Goldman Sachs. Apparently no employee likes to be reduced to a number – not even those who trade in them.
Goldman, like dozens of forward-thinking companies in every sector, of every size, is scrapping traditional, top-down quantitative performance systems in favor of egalitarian qualitative performance evaluations.
Here’s why the Goldman decision matters for you and your business.
First, quantitative structures ignore naturally occurring biases and human subjectivity. On a scale from 1 to 5, a certain manager’s ‘three’ may be another manager’s ‘four.’ And unfortunately, it’s all too often the employees themselves left scratching their heads to figure out what really means what, and what that really means for them … really.
Qualitative structures acknowledge the stabilizing framework of aggregated results, but go deeper by prompting for much needed constructive explanation.
What is it, exactly, that makes Tom’s presentation skills so resonant and Tina’s client management so masterly? And how can they apply the learned dexterity from one aspect of their job to become more efficient, more effective, in all that they do?
People learn from personalized, individualized reviews – not numerical equivalencies.
Second, top-down performance systems follow organizational hierarchies. Executives reviewing VPs, VPs reviewing directors, directors reviewing associates, and associates –well, you get the idea.
The problem? Finding solutions to your most pressing business problems doesn’t usually work that way. As any crowd-funded success story will illustrate, good ideas often bubble from the bottom, up.
Successful leaders understand that their job isn’t to claim a monopoly on all the right answers – but to spot and support them, wherever and whomever they come from. Performance systems that not only allow, but encourage colleagues from different business and departments to offer their words of advice to one another make it easier for leaders to spot, support, and sustain emerging talent. That makes the organization as the whole better, more unified, and stronger.
Third, old-time quantitative systems most often take the form of annual assessments. Think about that for a moment … do you want your employees only to improve once per year?
If you’re like the rest of us, you’d prefer to measure and monitor meaningful continuous improvement. That’s why when everything in our lives, from TV to food delivery, is on-demand, so should be workplace guidance.
Qualitative and open-sourced performance structures allow for employees to intake reviews on a deliverable, a project cycle, a growth term as you define it.
That’s employee development, on your terms.