News

The End of Traditional Employee Management and Assessment

You don’t have to skim very far through the business section these days to find yet another report of a Fortune 500 company discarding its old-fashioned employee assessment configuration.

Take the latest example of Goldman Sachs. Apparently, no worker likes to be reduced to a number come review time – not even those who trade in them.

Goldman, like myriad other forward-thinking companies in every sector, of every size, is tossing its traditional, top-down quantitative performance systems in favor of egalitarian, qualitative performance evaluations.

Here’s why the Goldman decision matters for you.

First, quantitative structures ignore naturally occurring biases and human subjectivity. On a scale from one to five, a certain manager’s ‘three’ may be another manager’s ‘four.’ And unfortunately, the direct reports are all too often left scratching their heads to figure out what really means what – and what that really means for them … really.

Qualitative structures acknowledge the sturdy scaffolding of aggregated results, but go deeper by prompting for much-needed constructive explanation.

What is it, exactly, that makes Tom’s presentation skills so resonant and Tina’s client management so masterly? And how can they apply the learned dexterity from one aspect of their job to become more efficient, more effective, in all that they do?

People learn from personalized, individualized, humanized reviews – not numerical equivalencies.

Second, top-down performance systems follow organizational hierarchies. Executives reviewing VPs, VPs reviewing directors, directors reviewing associates, and associates – well, you get the idea.

The problem? Finding solutions to your most pressing business problems doesn’t usually work that way. Ideas – at least the good ones – are meritocratic in nature, not hierarchical. As any crowd-funded success story will illustrate, good ideas often bubble from the bottom, up.

Performance systems that not only allow, but encourage colleagues from different levels and departments to offer their words of advice to one another make it easier for leaders to spot, support, and sustain emerging talent. That makes the organization greater than just the sum of its parts.

Third, old-time quantitative systems most often take the form of annual assessments. Think about that for a moment … do you want your employees to improve only once per year?

If you’re like the rest of us, you’d prefer to measure and monitor continuous improvement. That’s why when everything in our lives, from TV to food delivery, is on-demand, so should be workplace guidance.

Qualitative and open-sourced performance structures allow for employees to intake reviews on a deliverable, a project cycle, a growth term as you define it.

That’s employee assessment, development, and engagement, on your terms.

Kelly Gerson is a vice president at Luntz Global.