The annual performance review system is “dead”, and employees and their managers need a more engaging and regular process for managing performance, according to David Arkell, GE Australia & New Zealand’s human resources leader.
“The annual performance review is dead,” he said. “It’s a dramatic comment, but the concept of having an annual performance review has gone. It’s got to be much more frequent and much more regular.”
The “nine-box” system, which was used by former GE Chairman and CEO Jack Welch to manage people in (or out of ) the business, is still in use in GE today, though its application has changed in a number of ways, Arkell said.
“I think you’ll always need a nine blocker or a similar tool for large organisations to rank and differentiate performance, which can then help determine reward,” he said.
“It’s the inputs into this process that we need to change, and it also needs to be much more frequent.
“Give feedback along the way, I think that’s very powerful”
Arkell recounted a discussion he had with Steve Sargent (president and CEO of GE Australia and New Zealand) about 12 months after starting at the company.
“He gave me some feedback and said: ‘Look, I really love that you do this, this and this. I’d like you to really focus on this area a bit more’ and I thought: ‘That makes sense, I understand that.’
“So I focused on this and by the time we got to the performance review Steve said he was really pleased with how I had acted on his feedback. He didn’t wait till that annual review to say, ‘Mate, you’re not doing a real good job over here.’
“Give feedback along the way, I think that’s very powerful,” Arkell said.
One of the global focuses for GE is contemporising its nine-box method of performance management through building this kind of regular feedback into the process.
“So rather than setting your objectives at the start of the year, having a mid-year conversation about how you’re going and assessing performance at the end of the year, we want to give people more regular feedback on how they’re going, and that needs to be done in a technology driven way to capture that data.”
For the full interview with Arkell see the next issue of Inside HR magazine.
