Conventional staff appraisals 'slow, outdated'

Mr Pierre Nanterme, chairman and CEO of multinational firm Accenture, prefers managers on the ground to conduct their assessments of staff, rather than follow a performance review process dictated by the global human resources department.
Mr Pierre Nanterme, chairman and CEO of multinational firm Accenture, prefers managers on the ground to conduct their assessments of staff, rather than follow a performance review process dictated by the global human resources department.PHOTO: ACCENTURE

Management consultancy Accenture grabbed headlines this year when it announced that it was doing away with performance reviews for its 336,000 employees.

Chairman and chief executive Pierre Nanterme believes it is the right move as the review process is bloated, with too many assessment criteria while consuming "millions of hours" managing it over three months every year.

Instead of motivating or evaluating people, performance reviews have become a process of piling on tons of metrics and objectives, which leads to forcing rankings along a statistical distribution curve, said Mr Nanterme, who is based in Paris.

He told The Straits Times on a recent visit to Singapore: "Performance reviews say 50 per cent okay, 5 per cent excellent and 10 per cent below average. This idea you are going to treat people as a statistic and forcing it in your ranking is not appropriate.

"The outcome is questionable and we are done with that."

Accenture will start a new process next year where managers on the ground will get feedback from their staff. Employees will be assessed on three to four factors instead of the 20 or so now.

The new system is being tested in a few countries.

"We have a few options and we will learn from the tests. Then we will roll out globally to our operations in 120 countries," said Mr Nanterme, who was here to meet customers in Singapore and in the region.

The revamped process is about going back to the basics where the manager on the ground will do the assessment, rather than follow something that has been given to him by the global human resources department.

"We have selected the leader on the ground, so he should lead. He knows his people. He has to evaluate, be accountable and responsible to his staff, and not follow something... or having to stick his people into some ranking."

This new assessment has also been driven by the entry of younger or millennial employees, who are used to regular feedback on their social media networks.

Society, said Mr Nanterme, is moving in real time where people know everything they need to know in their social media networks and on their digital devices, and where they can connect with people around the world in a second.

"Who is going to wait for the annual review to get feedback when you are talking to your friends and colleagues immediately. I want to know how I'm progressing and performing now and not a year later."

With more millennials joining, Accenture has to go with the "flow" or else its employee retention and motivation will be affected. The multinational, which employs 1,900 people in Singapore, is not alone in dumping performance reviews. Video-streaming service Netflix, professional services firm Deloitte, software giants Microsoft and Adobe, and retailer Gap have all opted for a new approach.

Accenture's management consultants run projects that generated revenues of nearly US$32 billion (S$45.7 billion) last year. They identify opportunities and define strategic approaches for customers, which include governments and Fortune 500 companies. They not only frame new strategie, but also implement them.

With a new performance review, Accenture's global human resources has a better job now, that of formulating its skills strategy.

"In this digital age, we are also impacted like other companies. How many business scientists, data analysts and digital designers do we need? Where do we hire them? We are creating new jobs, so we need new profiles.

"There are also other issues like staff retention; how do we create an experience where our people will remain with us? These activities are more exciting than creating performance processes."

As the company prepares to hire about 100,000 people a year, many of whom are millennials, it is also aware that older workers need to stay relevant. Mr Nanterme is putting his attention on staff who are over 50, many of whom may think they have been sidelined.

"Age has nothing to do about being relevant. It is about your courage and ability to learn that is key to staying relevant. The difference today in the workforce is between people who want to continue learning and people who are not up for learning new things."

A version of this article appeared in the print edition of The Straits Times on September 28, 2015, with the headline 'Conventional staff appraisals 'slow, outdated''. Print Edition | Subscribe