Do you know what Accenture, Adobe, Microsoft and now General Electric have in common? They all have either stopped or are in the process of stopping formal annual employee reviews.
GE, under former CEO Jack Welch, famously imposed a ranking system based largely on the annual review. Welch is widely admired as an effective leader who did an amazing job building GE from 1981 to 2001. He earned the nickname “Neutron Jack” for his cost-cutting and reorganization, and his system, known as “rank and yank,” which sought to weed out the bottom 10% of performers every year, was an important decision-making tool. The point of the review and ranking, though, was to focus on improving performance companywide.
What GE is doing now, and other enterprises have already done, is to use technology to create a culture of performance. This is especially appealing to a younger, more mobile and tech-enabled workforce. GE is gradually rolling out internally a performance development app that facilitates more frequent feedback between managers and employees. Gone is the fright-inducing event known as the annual review.
It’s a brilliant move, frankly. Enterprises are discovering that they need to adapt to changing times and adopt new tools to reach, engage and develop employees. What worked in the Welch era in the 20th century doesn’t work so well today. GE’s longtime executive in charge of its management training center in Crotonville, Conn., Raghu Krishnamoorthy, says it best: “Command and control is what Jack was famous for. Now it’s about connection and inspiration.”
An enterprise the size of GE – or Microsoft or Accenture or Adobe – has a lot of people to connect and inspire. And of course not all those folks are in the same place. There is no easier way to engage a big audience in many locations than through a live event powered by video. Enterprises are discovering the advantages of live and on-demand video to reach, inform and engage employees as well as customers, and to develop employees through virtual classroom tools.
The lesson here is that video, used to deliver the right messages, can increase engagement. Multiple studies show that employee engagement is linked to enterprise financial performance. When workers are highly engaged, they often go above and beyond and contribute more than workers who are passive or disengaged. Aon Hewitt’s 2015 Trends in Global Employee Engagement survey found that, in 2014, the top organizations in engagement delivered total shareholder returns averaging 22%, eight points higher than those in the top quartile, and 10 points higher than organizations with only average engagement.
There is quite a lot of room for improvement, though. Aon Hewitt found that only 27% of North American companies had highly engaged employees in 2014, while 39% had moderately engaged employees. Meanwhile, 34% have both passively and actively disengaged employees. Imagine the potential turnaround for these companies if their leaders used the power of video to connect with employees, energize them and build excitement about the future? Next year’s survey could look very different.
Follow me on LinkedIn or visit INXPO to learn how live events powered by video enable connections in measurable ways, on any device, and help executive leadership to instill and develop culture in their enterprises.
Originally posted on LinkedIn.com