A groundswell of opinion has it that guided conversations twice a year, or even a form of ‘continual’ conversation, should replace annual reviews.

Maree Slater, with decades of experience as an HR executive, is very clear about her view of traditional performance management systems.

“I don’t think they’ve ever worked,” she says.

That’s why, in her most recent role, as executive general manager of HR at Echo Entertainment Group, she took a knife to the company’s performance management system.

I thought, ‘Why are we spending that money on a system no-one wants?’ It doesn’t work.”

Slater’s concern was that the traditional system wasn’t improving performance, boosting relationships or getting a better result. Rather, it was universally disliked and seen as cumbersome and of little value.

Her solution was to bring in a system of employee-driven reviews she named Echo Drive, which emphasised the journey to higher performance. Employees were asked to prepare for their at least six-monthly reviews by answering up to 10 questions about what had gone well and not so well since their last review, and analyse why.

“What we found was that the employees approached the process without trepidation because what was going to happen in that meeting was all there in writing in their own words. And most employees were very honest. In fact, they were more critical of their own performance than their managers were.”

Staff still had an agreed set of KPIs that were assessed on the basis of achievement. But the scale was simplified and transparent.

It took Slater some effort to convince a few of her line managers that abandoning the old system would work. However, many managers were supportive because the positive outcomes were clear.

“The new system was non-threatening, it was performance-driven, it was relationship-focused. Basically, managers and employees alike have told me they left those meetings with a sense of direction, with renewed enthusiasm and an improved relationship. They said they actually looked forward to the conversations.”

Gearing to positive conversations

At Deloitte, Alec Bashinsky, previously an advocate of performance management systems, is going through a similar process.

Unfortunately, says Bashinsky, who is national partner of people and performance at Deloitte, most performance management systems are geared to the negative.

“We are going to ‘blow up’ performance management,” he says.

There will be four components in the new positive system soon to be piloted at Deloitte’s Australian offices 

1. Regular weekly or fortnightly check-ins.

2. Short eight-question pulse surveys conducted via an app to give team managers quick views of how their teams are functioning and which individuals are working well.

3. A quarterly performance snapshot designed to be a real-time evaluation by managers of each employee’s day-to-day performance.

4. Quarterly talent reviews where, says Bashinsky, leaders “sit down and have a look at what the talent looks like in a specific business stream rather than trying to evaluate the whole workforce”.

In a huge cultural change for Deloitte, it will be a system without ratings. Instead of calibrating staff against each other, the spotlight will be shone on each individual’s performance.

“We are really trying to build the leader as a coach,” says Bashinsky. It’s a model he believes will appeal to younger workers who prefer regular feedback.

The biggest challenge for Deloitte will be the cultural change. “We have some fairly entrenched management styles within our leaders,” says Bashinsky.

Not all doom and gloom for performance reviews

Not everyone in HR thinks traditional performance management systems have had their day. “I don’t think it’s broken,” says Damian West, group manager at the Australian Public Service Commission.

However, there is room for improvement, concedes West, who has extensively researched how such systems operate in Australia’s federal government departments.

“The single most important factor is to ensure that performance expectations are clear,” he says.

“Managers and employees need to be able to define what high performance looks like for each employee.

“And it’s not a standalone thing. You need to understand – and ideally, measure – the drivers of high performance. You have to have good strategic plans that translate into good operational plans and you have to have good job design. You need to get recruitment and probation right and the training and development right – and the reward system. It’s not looking at the performance process in isolation.”

This article is an edited version. The full article was first published in the November 2014 issue of HRMonthly magazine as ‘Performance artists’. AHRI members receive HRMonthly 11 times per year as part of their membership. Find out more about AHRI membership here.