Ramasubramoni Ramasarma 1

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Date June 25, 2019

Pay for Performance Methods

Employees in any organization have to be judged on their performance periodically.

Typically this performance evaluation considers the accomplishment of the individual, group, or

the organization in total. However, we need something more nimble, real-time, and specific as

opposed to the detailed and complicated effort undertaken in many companies, mostly once a

year. Executives believe that current performance management systems are not good for

engaging employees or encouraging high performance and we may need to look beyond these

three methods (Goodall, Buckingham, & Ashkenas 2015).

The individual approach was what Deloitte (www.deloitte.com) chose when it redesigned

its performance management process in 2014-15 when it realized that the process for evaluating

its employees’ performance was out of step with its larger corporate objectives, plans, and needs.

This global audit, consulting, advisory, and tax services organization realized that the once-a-

year process was too ‘batched’ and these ratings were less valuable. It also noticed that the entire

performance management effort took nearly 2 million hours a year and wanted to talk to its

people about their performance and careers, without making it too administrative.

The company felt that its process was not transparent and focused on weaknesses rather

than strengths. It wanted a quick and reliable system that would help each employee use their

strengths, with great clarity of purpose and expectations. The system had to be one that would

positively drive performance in the future without focusing on past mistakes.

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Deloitte implemented a new process where every team leader had to check in with each

team member once a week. The leader was to discuss work and the larger concerns in the short

term, review recent work and offer training and suggestions. This was initiated by the team

members and done frequently so that the team leader knew about what was to be done with the

team member.

An aggregation of these review check data points over a year with due weight for projects

was expected to provide detailed information for succession planning, career development,

performance analysis and pay review. At the end of each project, the team leaders would put

down their responses to the future-focused aspect of each employee, with regard to the person’s

performance, the possible compensation increase or bonus, suitability to the team and promotion

prospects.

The regular staff review was expected to be weekly, fortnightly or monthly focusing and

help employees build on their strengths. While other organizations focus on the group, business

unit or the region or the sub-business unit, this method was expected to enable Deloitte to focus

on the effectiveness of the team. A preliminary test within the company across 60 high-

performing teams and more than 3200 employees revealed data about high-performance

employees (Goodall, Buckingham, & Ashkenas 2015). Before the roll out, Deloitte put all of its

managers through an extensive training program to ensure they had the right coaching skills for

this new focus. As part of the implementation of the system, Deloitte ran a change management

program comprising communication sessions, webinars, and workshops.

Deloitte’s benefit from the system was that it saved about 2 million working hours

annually (Carolyn Boyd 2015) that the company spent in its pay review and performance appraisal

process. It also found out that the weekly reviews helped raise a team member’s level of
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performance and commitment. The company was able to acknowledge and review performance

mainly through variable compensation.

This system of pay-performance evaluation at an individual level was able to measure the

performance of the individuals and the teams while providing them a roadmap of growth,

expectations, and engagement. Deloitte and its success with the individual review method is

indicative of the due process for the context of performance evaluation.

Works Cited

Goodall, Marcus BuckinghamAshley, et al. “Reinventing Performance Management.” Harvard

Business Review, 16 Nov. 2015, hbr.org/2015/04/reinventing-performance-management.

ears, Richard, and Graham J. Shields. Cite them right: the essential referencing guide.

Palgrave Macmillan, 2016.

StackPath, insightsresources.seek.com.au/deloitte-revolutionised-performance-management-

process