Like many
other companies, Deloitte realized that its system for evaluating the work of
employees—and then training them, promoting them, and paying them
accordingly—was increasingly out of step with its objectives. It searched for
something nimbler, real-time, and more individualized—something squarely
focused on fueling performance in the future rather than assessing it in the
past. The new system will have no cascading objectives, no once-a-year reviews,
and no 360-degree-feedback tools. Its hallmarks are speed, agility,
one-size-fits-one, and constant learning, all underpinned by a new way of
collecting reliable performance data. To arrive at this design, Deloitte drew
on three pieces of evidence: a simple counting of hours, a review of research
in the science of ratings, and a carefully controlled study of its own
organization. It discovered that the organization was spending close to 2
million hours a year on performance management, and that “idiosyncratic rater
effects” led to ratings that revealed more about team leaders than about the
people they were rating. From an empirical study of its own high-performing
teams, the company learned that three items correlated best with high
performance for a team: “My coworkers are committed to doing quality work,”
“The mission of our company inspires me,” and “I have the chance to use my
strengths every day.” Of these, the third was the most powerful across the
organization. With all this evidence in hand, the company set about designing a
radical new performance management system, which the authors describe in this
article. INSETS: Idea in Brief.;How Deloitte Built a Radically Simple
Performance Measure.. [ABSTRACT FROM AUTHOR]