How Deloitte has revolutionised the performance management process

Nearly a year after leading services behemoth Deloitte tore up its performance management system in favour of a nimbler, less-onerous approach, the brave move appears to be paying off. SEEK Insights & Resources sat down with Deloitte’s National Leader, People and Performance, Alec Bashinsky, to talk about how the changes are faring.

Employee response has been overwhelmingly positive to a program that, since June 2015, has been piloted by close to 40,000 staff around the globe, says Bashinsky. Deloitte has adopted a custom-designed system that starts with regular face-to-face check-ins between staff and their managers. Rather than filling out a lengthy review questionnaire once a year, staff are asked to answer snappy four-question ‘pulse’ surveys on their smart phones every quarter. Managers in turn fill in a short app-based performance snapshot – of only eight questions – about their team members once a quarter. The responses are confidential and the data is aggregated to give a picture of how teams are performing. “We set out to develop a framework that was simple, local and focused on real-time data and on individuals’ strengths,” says Bashinsky.

The business case for re-writing the performance management rulebook was rock solid, says Bashinsky. “The traditional process itself is highly administrative, and you’ve got to fill out a whole lot of forms, the ratings don't correlate to any metrics,” he says. “Think about the time it takes to propose an employee rating, then debate a rating and then go back and communicate a rating in any organisation. It’s horrendous. The process is not transparent and it focuses on the weaknesses.”

Performance management systems can also create ill-will, filling employees and managers with dread.

“I would say, as a general statement, that 2–3% of any organisation’s workforce is not great, for a whole range of reasons,” says Bashinsky. “But we put 97% of our people through a negative process. That doesn't mean you don’t manage out poor performers – because you do – but it’s about focusing on the 97–98% of our good people and building on their strengths and helping them grow within the organisation.”

A working party of leaders from seven Deloitte firms around the world collaborated with global talent guru Marcus Buckingham, to design a cloud-based framework called ‘Stand Out’. The research and design phase of the program took about nine months and started with asking an all-important question – why did Deloitte use its previous framework and was it actually working?

A key part of the program involves managers taking on a coaching role. Before the roll out, Deloitte put all of its managers through an extensive training program to ensure they had the right coaching skills for this new focus. To prepare the wider workforce, Deloitte ran an extensive change management program of communication sessions, webinars and workshops.

“It’s not unlike any other change management process you might go through,” says Bashinsky. “But can I tell you the take-up that we’ve had, our webinars were oversubscribed. Even the workshops were filled super-quick.

“There’s this genuine interest from employees once they understand it to get involved and to understand how it works because they don’t want to do forms and they don’t want to go through this mechanistic process.”

As a manager himself, Bashinsky has been able to see first-hand how the pilot program is working. “At the end of the year, I will have done a number of check-ins with my team, so I will know because of those conversations how they’re tracking, what their strengths are, those sorts of things,” he says. “I will now have four quarters of pulse survey information and performance snapshot information, which we aggregate into a regression analysis. “With the check-ins and that regression analysis data I am now more informed than I ever was around promotion and remuneration decisions based on that last 12 months of data.” Importantly, Deloitte’s people are really enjoying the new process, says Bashinsky.

Rather than aggregating up the data, Deloitte is increasingly focusing on team development and performance. “The beauty of the data is it sits at team level,” says Bashinsky. “The way the questions are phrased I can actually gauge the pulse of my team, how effectively they’re working, how fully engaged they are.” Many organisations focus on the business unit or the region or the sub-business unit, says Bashinsky. “This is now enabling us to… focus on the effectiveness of the team and that’s been a huge outcome for us,” he says. The regular staff check-ins can be weekly, fortnightly or monthly. “It’s a 15-minute conversation about the job staff are currently doing – how can we focus and help them build on their strengths. There’s no documentation, there’s no forms to fill in, there’s no records taken whatsoever.”

Another positive of Deloitte’s new system is its application to future workforces where Bashinsky says research shows up to 50% of workers could be independent contractors in less than a decade, thanks partly to technology and also a desire by younger workers not to be tied to the one workplace. “You’re going to see the whole workforce change and you need to have a talent strategy to cope with that,” he says. “If we’ve got somebody in here for six months, we’re still going to have a regular check-in with them. We’re still going to send them questions to ask how they’re going because they’re going to belong to a team."