Idea in Brief

The Problem

Not just employees but their managers and even HR departments are by now questioning the conventional wisdom of performance management, including its common reliance on cascading objectives, backward-looking assessments, once-a-year rankings and reviews, and 360-degree-feedback tools.

The Goal

Some companies have ditched the rankings and even annual reviews, but they haven’t found better solutions. Deloitte resolved to design a system that would fairly recognize varying performance, have a clear view into performance anytime, and boost performance in the future.

The Solution

Deloitte’s new approach separates compensation decisions from day-to-day performance management, produces better insight through quarterly or per-project “performance snapshots,” and relies on weekly check-ins with managers to keep performance on course.

At Deloitte we’re redesigning our performance management system. This may not surprise you. Like many other companies, we realize that our current process for evaluating the work of our people—and then training them, promoting them, and paying them accordingly—is increasingly out of step with our objectives.

A version of this article appeared in the April 2015 issue (pp.40–50) of Harvard Business Review.