Accenture to nix annual performance reviews, to implement informal project reviews

Company has 330,000 employees.

By Raif Karerat

WASHINGTON, DC: Global consulting firm Accenture, one of the largest companies in the world, announced it is taking the measure of nixing annual performance reviews for the entirety of its workforce.

Along with the performance review system, Accenture is also disbanding its rankings system, a common method of comparing employees to one another based on their performance.

Rather than having managers rank and review workers once per annum, the new initiative — called “Performance Achievement” — prioritizes informal reviews that can be given at a manager’s discretion, such as after a worker has completed a specific project, reported Yahoo Finance.

“Imagine, for a company of 330,000 people, changing the performance management process—it’s huge,” Accenture chief executive Pierre Nanterme told the Washington Post. “We’re going to get rid of probably 90 percent of what we did in the past.”

Accenture joins a small but growing host of major corporations that have done away with forced rankings. Six percent of Fortune 500 companies have gotten rid of rankings, according to management research firm CEB, including Deloitte, Microsoft, Adobe, and Gap.

“All this terminology of rankings—forcing rankings along some distribution curve or whatever—we’re done with that,” Nanterme said of Accenture’s decision. “We’re going to evaluate you in your role, not vis à vis someone else who might work in Washington, who might work in Bangalore. It’s irrelevant. It should be about you.”

CEB also revealed that the average manager spends more than 200 hours a year on activities related to performance reviews. When you add up those hours, plus the cost of the performance-management technology itself, CEB estimated that a company of about 10,000 employees spends roughly $35 million a year to conduct reviews.

“The process is too heavy, too costly for the outcome,” Nanterme said. “And the outcome is not great.”

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