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IBM performance review

After Accenture, IBM ditches traditional annual performance reviews

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When Accenture’s CEO Pierre Nanterme dumped the annual performance review last year, he described the move simply as, “we’re done with that”.

These four words proved to have a major impact across business and HR teams in the months ahead, with Microsoft, Adobe, Gap and a host of others ditching their review processes, including General Electric, which has been a huge advocate of it for years.

Now, IBM has gone the same way, with its 10-year-old system called Personal Business Commitments being replaced with an approach that includes more frequent feedback, and gives more opportunity to shift employee goals throughout the year.

Diane Gherson, IBM’s chief human resources officer, spoke to Fortune, saying a big impetus for the change was that IBM employees “were already doing work differently than the system assumed.”

Fortune reported that last year, Gherson and her team decided to change IBM’s performance review system, as part of a larger series of changes as the Big Blue transitions away from hardware to higher-growth areas like mobile, data analytics, and cloud-based services.

The previous performance review system asked employees to set their goals for the year in January, and schedule a mid-year check-in with managers. Employees would then receive a final assessment and a single performance score in December.

ALSO READ: Only 4% of staff think performance reviews are useful

To revamp its performance review system, Fortune reported that IBM turned to its 380,000 employees to crowdsource the process through its internal social media platform, garnering 75,000 views and 2,000 comments from employees.

The new app-based performance review system called Checkpoint goes live this month, helping employees set shorter-term goals, and managers providing feedback on their progress at least every quarter.

At the end of the year, employees will be judged across five criteria — business results, impact on client success, innovation, personal responsibility to others, and skills.

“In the old system, there was one score. People [got] sort of obsessed by that,” Gherson told Fortune. “In the new system, there are five scores. It leads to a much richer, more balanced discussion.”

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