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Accenture has recently made a big decision of ditching all the performance management reviews that it has been taking over the last few years. The company has decided to remove the performance management reviewing model approach from its business operations and processes. On one hand, some experts think that this is a most effective move taken by the company. On the other hand, some critics think that removing the performance management reviews would definitely affect the overall financial status of the company. This report has been written in order to investigate whether this decision would be beneficial for the company or not, and also for the future financial status of the company.
Many relevant resources and earlier similar examples like Adobe have been analyzed to come to a conclusion for the decision made by Accenture. Finally, some suggestions are provided for how the company can improve its employee performance after removing the performance reviewing approach. These suggestions mainly depend upon the removal of some of the drawbacks of the performance management review approach by the implementation of ‘check-in’ approach.
Table of Contents
The main motivation of writing this report is to analyze Accenture performance management and provide suggestions on their decision of ditching the performance management reviews by the company officials. After understanding the main reason of ditching the performance management report, some earlier successful examples of doing such changes in the MNC’s have been analyzed for better insights and recommendations.
This report can be used as a guide for how to manage the replacement of performance management with other relevant approach in the given business settings. This report can be useful for the management of any MNC to understand the main drawbacks of performance management reviewing approach and learning how to mitigate them.
This Accenture performance management report has been created after the thorough analysis of the case study of the Accenture company. Meanwhile, several other relevant research papers, books, and journal articles had been analyzed to provide the best possible suggestions for the questions asked at the end of the case study. The other relevant MNC’s who have already taken this step have been analyzed for the better insights of the benefits of abandoning the performance management approach and a novel approach of ‘check-in’ and its benefits have been analyzed for the future recommendations.
2.0 Company Background
Accenture is one of the largest MNC’s and conglomerate companies that deals in providing various services like digital, strategic, consulting, technology, and operations services (Finnegan, 2003). Accenture came into inception in the year 2009 in Dublin, Ireland and has been reaching new heights of sales and revenue generation onwards. Accenture has reported a net sales revenue worth of around $33 billion, approximately in the year 2016. The company has recently been operating in more than 120 countries, having a strength of 395,000 employees and 200 cities worldwide.
The management at Accenture has recognized that the performance management reviewing method had become a burden for the company and affecting its overall growth. The CEO of the company; Pierre Nanterme has taken the cognizance of this matter and decided to abandon the performance management approach from its business framework after consulting other responsible authorities and the management. Mr. Nanterme has said that they are going to get rid of all the reviews that they had been gathering all these years and would probably get rid of 90% of what they had been doing in the past. However, there may be many other consequences that may arise with this decision of the company (Nankervis, 2017).
4.1.1 A Positive Sign of Success
I think that stopping performance management reviews may become a positive sign of success for the Accenture. There are many drawbacks of using the performance management review approach because it is time consuming and tidy. The managers employed for a project have to spend their lot of precious time in analyzing and rating the performance of the employees working under their management, which sometimes come around 40 hours per manager.
Accenture is not only the MNC that had rejected taking the performance management reviews from the employees, but some famous MNC’s like Adobe and General Electricals has already removed this strategy from their business operations and adopted a new way of handling the various projects and performance related issues of the company, called ‘Check-in.’ The check-in approach is the new just in time approach of providing feedbacks to the performance of employees that does not require reviewing and feedback is done based on the time period of project and not yearly basis (Klikauer, 2016).
4.1.2 Reasons of Removing Performance Management Reviews
There may be several other reasons for removing the performance management reviews of the existing business operations for some MNC’s like Accenture. One of the common reasons may be the changing nature of work. Accenture is providing various services to its clients worldwide like consulting, digital, strategic, technology, and operations. All these services have probably different time frames of completion and approach for completion. If the company is using the same performance management approach for all these different services and employees working on these projects, then it may not suit the nature of the work. There are many performance management systems that may not consider how the work is done. Moreover, the life cycle of the projects for these different services may vary and need goal cycles of 1 month, or even a single week in many cases. Applying the performance management approach of reviewing the employees annually may not work properly on all such different projects. This is the prime reason why the Accenture company has decided to ditch the performance management review approach (Kinley, 2004).
4.1.3 Importance of the Decision
Many researchers have done extensive research to understand the importance of removing performance management review approach from the business operations and processes of the company, and they had found that this approach can also affect the collaboration among the employees of the concerned project. Nowadays, many MNC’s are adopting the conventional rating approach that can consolidate the level of collaboration, while making the project and business agile for the company (London, 2004). The MNC’s nowadays are now emphasizing on the project driven approach of rating, rather than rating the overall performance for the single year. The performance management approach was hurting the overall progress of the project in a team of employees who were fighting with each other to get high rating; rather than emphasizing on the collaboration to get best results for the project. The management at Accenture has realized this big flaw of performance management approach and thus removed it from their business operations and processes (Firth, 2008).
Finally, the removal of ratings may further help the managers to keep a direct touch with the employees, which is mandatory in MNC’s like Accenture. More frequent connectivity of the managers with the employees can help in employee development, better remuneration, and engagement that will be a better sign for the future of the company. Accenture has made a positive decision of removing the performance management reviews and other similar MNC’s are also looking forward to this decision. This can not only help the employees to perform well, but also the managers to concentrate on more important work (Martin-Rios, 2008).
4.2.1 Effect of Decision on the Financial Status
There are few philosophers and financial analysts who are still skeptical about decision made by the Accenture company. However, I think this decision is plausible for the future of the financial status of the company. There are already many MNC’s like Adobe, General Electricals, and Microsoft that have successfully removed the performance reviews from their business operations and processes successfully; without affecting the financial status of the company. In fact, the financial status of many companies like Adobe had increased to some extent, which can be a real motivating factor for Accenture performance management. There are many similarities of services in Adobe and Microsoft; who had already adopted the new check-in approach of reviewing the performance of their employees. Adobe provides digital solutions to their customer and Microsoft provides software solutions and both these services are also provided by the Accenture. So, Accenture can learn some lessons from these companies who had already adopted the new approach (Culbert, 2008).
4.2.2 Mitigation of Time Constraints
One of the largest assets for any software, digital, or consulting service provider companies like Accenture or Adobe is its employees. The reason why these companies invest large amounts of money to manage the employees and monitor their performance is because their effort and hard work directly count in terms of sales and revenue generation for these companies. Meanwhile, the main motivation of managers working under these companies is to provide the services in the meantime, without affecting the quality. However, the managers would have to spend a lot of time in giving performance reviews in the performance management reviewing model (Mone, 2011). Every manager would have to spend almost 40 hours of their time in gathering the performance reviews of the employees, which otherwise can be put to some other plausible works.
So, Accenture and other such companies have understood this flaw within the performance management system and removed it from their business operations and processes. This can not only be a positive move for the managers and employees, but it can also bolster the financial status of the company. If the employees would not have to bother about their annual performance rating for getting paid, then they can put their best efforts to provide their best to the project they are working with, thereby improving the overall satisfaction rate for the clients. This can further inspire the clients to order more projects to the company in the meantime (Granmo, 2016).
4.2.3 Learning from Earlier Successes
Adobe is one of the best examples in front of Accenture for the adoption of new check-in model after removing the performance management model. After Adobe adopted the check-in model, the turnover of the company had increased to a considerable amount and involuntary attrition had increased by 2-3 percent. In the previous annual reviewing model, managers were forced to address the poor performance of the employee at the end of the year. However, with check-in model, managers became capable of managing the performance of the employees on the ongoing basis, thereby leading to an active performance management, which was required when the underperforming employees chose to leave after an open discussion with the manager.
Moreover, the brand image of the Adobe had also consolidated with a higher number of employees saying that they would definitely recommend Adobe to their friends and family members. If this is not a motivating factor for Accenture, then it would be amazed to know that after the implementation of new check-in model; the stock value of Adobe had been increased from $33 to $90 per share, which is definitely a remarkable change in terms of financial stability for the Adobe (Tahvanainen, 1998).
The best way Accenture can improve the performance of its employees after removing the performance management model is through adopting the check-in model of Adobe, which is described in the table below: —
|The Annual Performance Review Approach||The Check-In Approach|
|To set the priorities||Employees priorities set at the beginning of the year and never visited during the year.||The check-in approach allows the manager to adjust and discuss the priorities with the employees regularly.|
|Bolstering the feedback process||In this approach, the feedback process is often long and time consuming that includes soliciting feedback, accomplishments, and writing reviews.||The check-in approach makes the feedback process flexible with a feature of dialogue with not any kind of formal written documentation or review. This can further help the manager to get in proper touch with the employees.|
|Managing the Compensation decisions||This approach has a very long and time-consuming compensation management process of ranking and rating each employee to determine the equity and salary hike.||This process is flexible and there is no need for formal ranking or rating of employees and the manager confirms the equity and salary based on performance.|
|The team role of HR||The HR team is responsible to manage processes and paperwork to ensure the completion of all steps.||HR team informs the managers and employees to have a constructive conversation and management of all steps.|
|Resources and training procedure||The HR partners are responsible for providing training and resources that couldn’t always reach every employee.||A centralized center generally known by the name of the Employee Resource Center is responsible to provide help and answer to the query of employees whenever required (Schraeder, 2011).|
There are many companies like Adobe and Accenture who are joining a bandwagon of the new approach of removing the performance management reviews and adopting some new reviewing model like the check-in, to make their business operations and processes more agile and to make the project more focused to the time constraints. Earlier, the managers at Adobe and Accenture were really wasting their time and effort in providing annual reviews to the employees, which otherwise was either not required or not relevant to the proposed project or business settings. This report has briefly described why the decision of Accenture would not affect the financial status of the company and also provide suggestions of improving the employee performance of the company. Although all efforts have been made to make this report effective, however, there may be some limitations of this report in terms of implementation and validity.
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