US Firms Embrace Softer, More Frequent Reviews

Performance appraisals drive everyone nuts, but many US companies are doing them more often.

In June, Morgan Stanley and Goldman Sachs announced an overhaul of their performance review systems—the methodology they use to assess the work of their staff.

Both US banks were said to abandon a numeric scale for ranking employees in favor of a more flexible system based on more frequent and verbal feedback coming from bosses as well as from peers and direct reports.

The two banks are only the latest additions to a growing group of US companies that are reviewing performance reviews: In the past year Microsoft, Dell, Accenture and Gap all reported changes in the way employee work
is appraised.

Often considered a necessary evil, performance evaluations have sometimes dominated the life at large corporations, and not only for the distress the reviews occasion in staff. Talking twice a year or more with all employees can be a time-consuming process. The idea of abandoning the numeric approach suggests fewer meetings are needed to produce homogenous judgment calls across departments in the same company.