Amazon is changing its ways when it comes to employee performance reviews. The company, known for its harsh employee assessments, is launching a new annual review process next year.
Commenting on the change, an Amazon spokesperson told Human Resources magazine: "We're launching a new annual review process next year that is radically simplified and focuses on our employees' strengths, not the absence of weaknesses. We will continue to iterate and build on the program based on what we learn from our employees."
Currently, Amazon still uses the controversial stack ranking performance review system, which sees all employees being ranked against each other. Managers divide their subordinates into groups by identifying for example the top 15%, middle 75%, and bottom 10% of their employees. Staff who find themselves in the bottom group often end up being let go.
The performance review method is also known as forced ranking, or the rank-and-yank system, since it forces managers to assign someone to the bottom category, even if they've been performing well. Critics argue the system yanks away people who are actually doing a good job, simply because their peers did ever so slightly better.
According to GeekWire, the word among employees is that Amazon will significantly change or even completely eliminate the existing stack ranking system. The company itself did not provide any further comment with regards to the new review process. The new annual review process is expected to be implemented as of February 2017.
Amazon's move away from its traditional review process comes as more and more companies are finding new ways to assess their employees' performance. In the past few months, companies like Accenture, IBM, and even performance review company SAP all announced they were scrapping their traditional annual review system and moving on to more continuous review methods.
Arguably, one of the things driving the change in the performance review industry is the rise of the Millennial employee. No longer satisfied with an annual chat with their manager, and not afraid to voice their discontent, Millennials are leading employers to rethink their performance review systems.
As a result, technology companies are designing new ways of assessing and improving employee performance. Just this week, tech startup Zugata raised US$7 million in funding for their software as a service that helps employees gather feedback from each other directly, without the involvement of managers or HR departments.
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