The trend towards employers removing ratings from performance management schemes started to accelerate in mid-2015, according to research by the NeuroLeadership Institute previewed in a recent edition of Harvard Business Review. By September this year, 51 large firms were identified to be moving to a no-ratings system and, according to research by Deloitte cited in the preview around 70% of companies are now reconsidering their performance management strategy.
David Rock, co-founder of the NeuroLeadership Institute, and Beth Jones, a senior consultant at the Institute, identify four factors behind the trend:
Rock and Jones conclude their Harvard Business Review:
‘Companies who have replaced ratings tend to be anxious about it beforehand and enthusiastic about it afterward. Their employees are happier, which encourages more engagement and better performance. It should be no surprise that treating an employee like a human being and not a number is a better approach. Yet it has taken a few bold companies to lead the way and show us that life is better on the other side. Only time will tell how lasting the trend truly is, but I strongly suspect we are at the beginning of something big.’