Deloitte replaces annual ratings with weekly check-ins and four-question snapshots

In April 2015 Harvard Business Review published 'Reinventing Performance Management' by Marcus Buckingham and Ashley Goodall, describing how Deloitte was redesigning the way it evaluated its roughly 65,000 US professionals. The old process of cascading objectives, annual forms and ratings consumed close to two million hours a year, and the company's research showed that ratings were dominated by 'idiosyncratic rater effects': two leaders rating the same person often disagreed because the rating said more about the leader.

The new design kept three rituals instead of one annual event: a weekly check-in between team leader and team member, initiated by the member; a 'performance snapshot' at the end of every project or once a quarter for long projects, where the leader answers four future-focused statements about pay worthiness, wanting the person on the team, low-performance risk, and promotion readiness; and the annual compensation decision, now informed by those snapshots rather than a single backward-looking grade.

Deloitte said the system had no cascading objectives and no once-a-year review. The point was to fuel future performance — to recognize, see and act on it — rather than to rate the past. The redesign was grounded in three bodies of evidence: the hour count, the science of ratings, and a controlled study of the firm's own high-performing teams, which found that employees' chance to use their strengths daily was the strongest correlate of team performance.

The article turned Deloitte into the reference case of the 'death of the annual review' wave and was read by HR functions worldwide as both a blueprint and a provocation: commentators noted that two of the four questions were still ratings, while the check-in ritual was widely judged the most transferable piece.