How to eliminate performance reviews and create a coaching culture

Over the last 2 to 3 years companies have figured out that there is a better way to improve performance than to provide semi-annual and annual performance reviews. 90% of HR professionals don’t believe the process provides accurate information. Performance management systems don’t align with financial performance. In 2012 Donna Morris,* Sr. V. P. Talent Management at Adobe, eliminated performance appraisals. Pierre Nanterme,** CEO of Accenture, recently announced that the annual performance review is going away.

In 2014, as close as could be estimated, 4 to 12% of businesses ditched their numerical performance ratings. Also, 6% of Fortune 500 companies have gotten rid of performance rankings says CEB, a management research firm. This is becoming a trend, and I know why.

I was in Human Resources management for 23 years of my corporate career. I struggled each year to improve the performance review process and boost the level of engagement with little improvement. A Sibson Consulting study found that only 30% of employees trust their performance management system. Traditional performance management “ain’t workin “.

Performance management is supposed to improve the level of engagement, but most people feel despondent walking out of their review even though they get good marks. What is a better way to manage performance and increase the level of engagement in your business? Creating a coaching culture replaces the annual performance appraisals and increases the levels of engagement that improves business outcomes and profit: research supports this claim. A coaching culture supports the following outcomes:
•  Immediate positive, corrective or development feedback
•  Increases productivity
•  Raises the level of engagement
•  Enhances overall performance
•  Reduces turnover
•  Builds and maintains trust
•  Allows managers to be more productive

I have trained over 100 managers to coach in their environment: which is not the way I coach my clients. Managers need a simple, easy-to-use method to coach people “in the moment” rather than immediately telling them what to do or change. The phrase to remember is “when you see something, say something”. Coach Right Now! is the program that trains and certifies leaders and managers to coach in a timely and frequent manner. A coaching culture is a strategic endeavor. It takes time to integrate coaching into the current culture and attach coaching to other business systems for sustainability. First, managers need to complete a program that certifies them to coach and become a “no-performance-appraisal manager”.  Then, HR policies need to support managers and the culture shift.

*Donna Morris, Business Insider, April 10, 2014

** Pierre Nanterme, Washington Post, Lillian Cunningham, July 21, 2015


About Bud Roth

Bud is a seasoned executive with over 25 years experience working with Fortune 500 companies. Roth Consulting Group LLC focuses on team and executive coaching, organizational renewal, expatriate support, and improving leadership performance. Bud's recently published book, Be More Productive – Slow Down, suggests methods of reflection and actions that guide us to regain control of our busy life and reduce stress by slowing down.

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