Why GE had to kill its annual performance reviews after more than three decades

Dilbert's yearly performance review

Yearly performance reviews come in many shapes… they could probably all, with benefit, be replaced with a closer and better dialogue in the daily work life. The comic strip is from an article with the opposite opinion.

“…we think over many years it had become more a ritual than moving the company upwards and forwards”.

This is what happens to many ideologies in companies – either they are never believed and quickly dies out, or they are believed to a level where they have no foothold in reality – and, hence, are being maintained far beyond the point where it should have been clear that they do no good.

What is particularly interesting in many company change programs is that the companies often stay in them for decades. What really should have been a transition to another way of working, a development of the company, becomes an eternal hunt for the original ideal – ignoring all of the natural development of the company that happens in between. And therefore Six Sigma or the yearly performance measurement could not survive in GE in the long run.

Often it is said that any kind of improvement program will not work – it will be attempted, then left behind and a new one will be attempted. The main reason for this is that every improvement program should be specific for each company: you cannot copy others’ success, because the preconditions and the situation in general for your company will be different. And, as mentioned above, life goes on during and after the transition, which must be taken into account as well and included in the general management scheme. The transition itself really should go, quickly, from a special change project into becoming standard management practice in the company, which additionally should keep adding, removing and adjusting such practices, as life moved on.

The article below, written by Max Nisen and published on Quartz, is full of interesting thoughts!

Why GE had to kill its annual performance reviews after more than three decades

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