For Companies Doing Away with Performance Management System and Having No Ratings over the Recent Years: What Has Been Learned?

Abstract

There is a recent trend in moving away from ratings systems in performance management. In a survey of 300 HR leaders, 21% have either already or are planning to remove ratings from their performance management. (See Appendix A) Companies have been shifting their systems in reaction to the changing environment of work, changing needs of employees and the need for increased collaboration in a dynamic working world. New systems promise improved talent development, reduced cost of performance management, and increased retention of millennial talent. However, this trend is still very recent and there is little research on the short-term or long-term effects of these shifts to new systems.