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Management Masters: 5 Trailblazers in Performance Management and How to Apply Their Wins

Kris Duggan
Kris Duggan

Six months following the publication of our first PM Watch, scores of organizations have done away with the annual review, rankings and ratings.

Numerical systems for performance management boil the progress of people your company’s greatest asset down to a number.

This is why I predict that by early 2017, 50 percent of the Fortune 500 businesses will kill annual rankings, driven and trade them in for performance development processes to support frequent feedback, agility, transparency, and coaching across the workforce. 

In recent months, a growing number of organizations have made it a point to reveal their new performance management and development processes and their progressive thinking behind a fresh methodology.

These innovators are outpacing the competition by investing in their own talent. They’re collectively prioritizing regular performance feedback and transparency by adopting new practices that keep up with the speed of work. Keep your eyes on these five in the coming months:

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1. Morgan Stanley

The Wall Street financial firm has been using a numerical rating scale for employees for years, but in recent weeks, went public with its new idea to evaluate employees with adjectives. According to Morgan Stanley’s global head of talent management, Peg Sullivan, in a recent New York Times article, this switch from numbers to adjectives is “about giving people more information and something they can do more with. It’s more candid and memorable.” Doing away with rankings and ratings and taking a more holistic approach allows Morgan Stanley to give its employees more direct feedback and take a holistic approach to developing workers.

2. Goldman Sachs

Morgan Stanley’s biggest competitor, Goldman Sachs, listened to its employees before making the call to abandon its old rating and rankings system. In an internal survey, Goldman Sachs employees requested more frequent and constructive feedback. Josh Bersin, HR industry expert, and principal at Deloitte, points out that giving employees numerical ratings means they’re stuck with the number for an entire year.

This label doesn’t convey how they improve and doesn’t take into account a variety of outside factors, a process that can be entirely de-motivating for employees. As Goldman Sachs managers communicate more frequently and regularly with employees, it will be easier to focus on improving employee’s future work instead of dwelling in the past.

3. Adobe

Adobe has been implementing frequent check-ins and regular feedback between managers and employees for enough time to see an impact by the numbers. Adobe’s SVP for People and Places Donna Morris has gone on record to say the company has experienced 30 percent less employee turnover with a frequent check-in program, and involuntary departures have increased by 50 percent because the new system “requires executives and managers to have regular tough discussions with employees who are struggling with performance issues rather than putting them off until the next performance review cycle comes around.”

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4. Ryan

Global tax firm Ryan has become a poster child for work-life integration for employees because its managers and employees work so closely together to develop specific goals and performance metrics. They’ve taken a non-traditional approach to performance management by utilizing an exorbitant amount of transparency, communication and workplace conversation to always stay aligned. This allows a large level of trust between managers and employees, and employees focus on the work that matters most.

5. General Electric

GE was previously known for having one of the toughest performance review processes, complete with rankings, ratings and a bell curve that effectively helped the company let go of low-performers. They are now a great example of the possibility of cultural change, as they overhaul their performance management process. According to Quartz, GE is experimenting with replacing once-a-year formal review with more frequent conversations and an internal mobile app that supports manager and peer feedback.

What Can We Learn From These Trend-Setters?

The difference between the organizations driving change, like the five listed above, and those remaining stagnant is their investment in performance development. There’s one thing these five trailblazers have in common: they’re having frequent performance conversations, and they are fostering an environment that allows employees and managers to communicate effectively.

In each of these cases, the organization is threading regular conversations between managers and employees into their performance management processes. It's these performance conversations that drive alignment, motivation and engagement among workers.

As priorities shift and the pace of work continues to accelerate business owners should place greater emphasis on individualized feedback and regular check-ins between managers and employees. Performance development starts with empowering managers and employees to converse regularly. Here are three easy ways business owners can get started today:

Go for the goals

Goal-setting has been used as a method for achievement by businesses and individuals for years, but actually formalizing it at work will create a baseline for progress and improvement. Employees are looking for opportunities for learning and growth, and goal-setting helps them align their objectives to bigger company priorities. Setting, achieving and reflecting on goals should all be points of discussion between managers and employees, to keep conversations focused on employee growth.

Goal setting has its perks for business owners too according to a  Bersin by Deloitte report, companies that have their employees revise or review their goals on a monthly basis are 50 percent more likely to score in the top quartile of business performance, yet only nine percent of respondents do.

Empower managers

Middle managers are big drivers of performance conversations across your organization. MIT researcher Donald Sull found that only 55 percent of middle managers can name any of their company’s top five priorities and fewer than one-third of senior executives’ direct reports clearly understand the connections between corporate priorities. 

When managers understand the connections between the goals they set for themselves and for those they manage, and how they play into the long-term business objectives, it allows the entire organization to stay aligned and function more cohesively.

Related Article: Why Every Company Needs Business Process Management


We can talk about performance development and conversations all day, but how do business owners and managers actually go about implementing it? I've found that conversations typically fall into five categories: goal planning and reflection, progress updates, manager-led coaching, upward feedback and career growth. For more information on using these types of conversations for performance development, check out this guide.

People are always going to be your most important asset. Investing in better performance development tactics and strategies will ensure they stay happy, and aligned with your company goals. 

Image Credit: Prostock-Studio / Getty Images
Kris Duggan
Kris Duggan Member
Kris Duggan is the founder and CEO of BetterWorks, enterprise software for easily managing collaborative goals and ongoing performance conversations. Duggan believes technology should help people reach their full potential at work and has led his team in building a business operating system to help high performing companies align and engage their teams, execute more effectively and ultimately become more successful. Prior to BetterWorks, Duggan was the founding CEO of Badgeville, where he led the company from its bootstrap phase to become a fast-growing enterprise software company and trailblazer in the employee engagement industry. Duggan is an adjunct professor at Singularity University and Alchemist Accelerator, and has served as an advisor to high-growth companies in the Bay area including Palantir and RelateIQ.