Josh Bersin of Deloitte reported that “More than 60% of all companies are redesigning (or have redesigned) their performance management process, typically moving from top-down rating and ranking to a feedback-centric, developmental, often rating-less model.”
There’s a couple of benefits to a non-numerical performance review model:
- Improves morale
- Performance reviews will feel more constructive
- Poorly rated employees will be less defensive at the performance review
There’s also a few disadvantages:
- Employees will lose an opportunity to see how they are perceived relative to others
- Employers will lose a datapoint to identify poor performers
- Employers will lose a datapoint to determine merit-based bonuses