The dominant format for performance appraisal systems in large U.S. industrial companies continues to be an objective-based approach such as management by objectives (MBO). Most companies conduct formal performance ratings annually or semi-annually. However, the traditional way of performance rating is receiving more and more doubt. With the development of HR theories, practices and technology, many companies are trying to manage employee performance in new ways

Lei, Ye

Tian, Bixi

English

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Fall 2016 
What are Alternatives to Traditional Performance Rating Cycles 
and Processes? 
Ye Lei 
Cornell University 
Bixi Tian 
Cornell University 
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What are Alternatives to Traditional Performance Rating Cycles and Processes? 
Abstract 
The dominant format for performance appraisal systems in large U.S. industrial companies continues to 
be an objective-based approach such as management by objectives (MBO). Most companies conduct 
formal performance ratings annually or semi-annually. However, the traditional way of performance rating 
is receiving more and more doubt. With the development of HR theories, practices and technology, many 
companies are trying to manage employee performance in new ways. 
Keywords 
human resources, performance rating, performance management, feedback, 360 feedback, assessments, 
no assessments, performance ratings, millennials, generation Y, coaching, getting rid of ratings, 
performance feedback, everyday performance management, constructive feedback, performance issues, 
goals, priorities, technology, human capital, pay, compensation, rewards, incentives 
Comments 
Suggested Citation 
Lei, Y., & Tian, B. (2016). What are alternatives to traditional performance rating cycles and processes? 
Retrieved [insert date] from Cornell University, ILR School site: http://digitalcommons.ilr.cornell.edu/
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    Nov. 2016 
Ye Lei & Bixi Tian HR Online Research and Reporting Methods 
Executive Summary 
    What are alternatives to traditional performance rating cycles and processes? 
The dominant format for performance appraisal systems in large U.S. industrial 
companies continues to be an objective-based approach such as management by objectives 
(MBO)1. Most companies conduct formal performance ratings annually or semi-annually. 
However, the traditional way of performance rating is receiving more and more doubt. With 
the development of HR theories, practices and technology, many companies are trying to 
manage employee performance in new ways. 
When: More Frequent Check-ins Instead of an Annual Number 
    Instead of an annual performance evaluation, some companies adopt more frequent check-
ins and feedback. Here are their main reasons: first, the nature of the workplace has changed, 
leading to employees’ needs for a much shorter goal cycle ranging from months to even weeks2. 
Second, the nature of the workforce has changed. Not only do companies need to develop talent 
faster, the new workforce, especially the millennials, want feedback and coaching right away 
(Appendix 1)3. Besides, it is more fair than an annual evaluation because managers are more 
motivated to communicate to their employees regularly, and thus have a better understanding 
of their performance2. Additionally, it promotes employee engagement, as it motivates 
employees to be more mindful of their performance all year round2.   
What: Getting Rid of Ratings: 
    There are many reasons for companies to eliminate ratings: (a) the disagreement when 
multiple raters evaluate the same performance, (b) the failure to develop adequate criteria for 
evaluating ratings, (c) the weak relationship between the performance of ratees and the ratings 
they receive, (d) the inconsistent effects of performance feedback on subsequent performance4, 
and (e) the enormous amount of time spent on the numbers themselves instead of focusing on 
how to improve performance2. 
Case Studies:  
1. Cargill Inc.: In 2012, Cargill introduced its "Everyday Performance Management"
system to incorporate daily encouragement and feedback into on-the-job conversations.
Cargill says it's seen measurable improvements after managers began giving
constructive feedback that was forward-looking, instead of reviewing what had
happened in the past.5
2. Adobe: Adobe introduced a frequent check in program which requires executives and
Research Question 
Introduction 
New Performance Evaluations: When, What & How 
managers to have regular “tough discussions” with employees who are struggling with 
performance issues rather than putting them off until the next performance review 
cycles comes around. After implementing this program, the company cut voluntary 
employee turnover by some 30%.6 
3. General Electric: Supervisors still have an end-of-year summary discussion with 
subordinates, but the goal is to push frequent conversations with employees and keep 
revisiting two basic questions: What am I doing that I should keep doing? What am I 
doing that I should change? Annual goals have been replaced with shorter-term 
“priorities” which are based on customer needs.7 
4. Deloitte: Deloitte advocates every team leader to check in with each team member once 
a week. These brief conversations allow leaders to set expectations for the upcoming 
week, review priorities, comment on recent work, and provide course correction, 
coaching, or important new information.8 
5. Accenture: Accenture had been quietly preparing to revamp up to 90% of its old 
methodologies with a new process it began rolling out in September 2015. The 
company is shifting focus to immediate performance development, rather than an 
annual forced ranking based on the past year's metrics.9 
How: Use More Technology in Performance Rating: 
More and more organizations are relying on innovative technology solutions to implement 
performance management best practices and automate painful manual processes. For example, 
GE and Accenture both use an app to help those within the organization deliver feedback and 
relay feedback.10 Here are six ways HR professionals who manage performance can use 
technology to serve internal customers.  
1. Simplify the evaluation process for managers;  
2. Help employees feel a greater sense of alignment with the organizational mission;  
3. Make employees more active participants in their evaluations;  
4. Communicate clear expectations to employees;  
5. Demonstrate to executives where organizational strengths and weaknesses lie;  
6. Provide leaders with the information they need for the board of directors, as well as for 
compliance and regulatory purposes.11  
With traditional performance ratings, companies spend a significant amount of time on 
evaluation but comparatively little on development. These new trends in performance 
assessment have one thing in common: they're all switching their focus from dictating what 
employees should do at work to helping develop their skills as individuals.12 Since human 
capital is every business's greatest resource, the future of performance management will 
include more feedback and place a greater emphasis on development. Because performance 
impacts employees’ pay, promotion and other career opportunities, cares must be taken when 
companies are trying to change their performance rating system.13 
Conclusion 
 
References: 
1. Research and practice in performance appraisal: Evaluating employee performance in 
America's largest companies, by Thomas, Steven and Bretz, Robert D, Jr. 
<http://search.proquest.com/abicomplete/docview/231132233/FA2816230F7E420BP
Q/1?accountid=10267> 
 
2. Why More and More Companies Are Ditching Performance Ratings 
< https://hbr.org/2015/09/why-more-and-more-companies-are-ditching-performance-
ratings> 
 
3. Millennials Want to Be Coached at Work, by Karie Willyerd 
<https://hbr.org/2015/02/millennials-want-to-be-coached-at-work> 
 
4. Getting Rid of Performance Ratings: Genius or Folly? By Adler, Seymour; Campion, 
Michael; Colquitt, Alan; Grubb, Amy; Murphy, Kevin; et al. 
<http://search.proquest.com/abicomplete/docview/1801399916/38E318AD4C5D416
BPQ/7?accountid=10267> 
 
5. Six companies that are redefining Performance Management, by Kris Duggan, 
<https://www.fastcompany.com/3054547/the-future-of-work/six-companies-that-are-
redefining-performance-management> 
 
6. Reinventing the Wheel: How companies like GE, Adobe, and Deloitte get rid of the 
performance review with one on ones, <https://getlighthouse.com/blog/get-rid-of-the-
performance-review/> 
 
7. Six companies that are redefining Performance Management, by Kris Duggan, 
<https://www.fastcompany.com/3054547/the-future-of-work/six-companies-that-are-
redefining-performance-management> 
 
8. Reinventing the Wheel: How companies like GE, Adobe, and Deloitte get rid of the 
performance review with one on ones, <https://getlighthouse.com/blog/get-rid-of-the-
performance-review/> 
 
9. Six companies that are redefining Performance Management, by Kris Duggan, 
<https://www.fastcompany.com/3054547/the-future-of-work/six-companies-that-are-
redefining-performance-management> 
10. Six companies that are redefining Performance Management, by Kris Duggan, 
<https://www.fastcompany.com/3054547/the-future-of-work/six-companies-that-are-
redefining-performance-management> 
 
11. 6 Ways Performance Management Technology Supports Internal Customers, by The 
Editorial Staff, <http://education.healthcaresource.com/employee-evaluations-using-
performance-management-to-engage-staff-and-improve-service-to-senior-leaders/> 
 
12. Six companies that are redefining Performance Management, by Kris Duggan, 
<https://www.fastcompany.com/3054547/the-future-of-work/six-companies-that-are-
redefining-performance-management> 
 
13. How to Ditch Performance Ratings And Still Evaluate Employees Fairly And 
Accurately, By Steven Hunt, <https://www.eremedia.com/tlnt/how-to-ditch-
performance-ratings-and-still-evaluate-employees-fairly-and-accurately/> 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Appendix 1. 
 


What are Alternatives to Traditional Performance Rating Cycles and Processes?

The dominant format for performance appraisal systems in large U.S. industrial companies continues to be an objective-based approach such as management by objectives (MBO). Most companies conduct formal performance ratings annually or semi-annually. However, the traditional way of performance rating is receiving more and more doubt. With the development of HR theories, practices and technology, many companies are trying to manage employee performance in new ways.What_Are_Alternatives_to_Traditional_Performance_Rating_Cycles_and_Processes.pdf: 669 downloads, before Oct. 1, 2020

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