Revolutionizing Performance Management at Deloitte

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When it comes to the working of an Organization it is evident we have the performance of the organization checked periodically. The Big Four Firms that handle offering audit, assurance services, taxation, management consulting, advisory, actuarial, corporate finance and legal services. They handle the vast majority of audits for public companies as well as many private companies. The companies are Deloitte, Ernst & Young (EY), KPMG and PricewaterhouseCoopers (PwC). Deloitte was founded in 1845 in London, England by William Welch Deloitte. He was the first person to be appointed as an independent auditor for a public company "the Great Western Railway" and went on to builds his credibility and business on the railway and hotel industries.

Deloitte accepted his first partner in 1857 and opened his first overseas office in New York in 1880. After Deloitte's retirement in 1897, the company started on a long series of partnerships, affiliations, and mergers that continued into the 21st century, not to mention countless name changes. Key persons involved in the growth and direction of the company include George Bailey, George Touche, and Nobuzo Tohmatsu.

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The first appearance of a management consulting function at Deloitte was after George Bailey, then president of the American Institute of Certified Public Accountants joined the organization in 1947. To further strengthen the company's consulting business, Deloitte & Touche partners decided to create Deloitte & Touche Consulting Group in 1995. In more recent years, major developments in Deloitte's consulting business include the purchase of the North American Public Service practice of BearingPoint (formerly KPMG Consulting) in 2009 and their acquisition of Monitor Group earlier this year.

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Deloitte's vision is unchanging: Deloitte aspires to be the Standard of Excellence, the first choice of the most sought-after clients and talent. Deloitte shared values are timeless. They succinctly describe the core principles that distinguish the Deloitte culture.IntegrityDeloitte believes it is reputation and behaving with the highest levels of integrity are fundamentals to who we are. The company demonstrates a strong commitment to sustainable, responsible business practices. Outstanding value to markets & clientsDeloitte plays a critical role in helping both the capital markets and our member firm clients operate more effectively. We consider this role a privilege, and we know it requires constant vigilance and unrelenting commitment.

Commitment to Each Other

We believe that our culture of borderless collegiality is a competitive advantage for us, and we go to great lengths to nurture it and preserve it. We go to extraordinary lengths to support our people.

Strength From Cultural Diversity

Deloitte's member firm clients' business challenges are complex and benefit from multidimensional thinking. We believe that working with people of different backgrounds, cultures, and thinking styles helps our people grow into better professionals and leaders. As of 2017, Deloitte is the 4th largest privately owned company in the United States. As of 2015, Deloitte currently has the highest market share in auditing among the top 500 companies in India. Deloitte has been ranked number one by market share in consulting by Gartner, and for the fourth consecutive year, Kennedy Consulting Research and Advisory ranks Deloitte number one in both global consulting and management consulting based on aggregate revenue. Deloitte by the numbers 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007Revenues (US$ in billions) $43.2 $38.8 $36.8 $35.2 $34.2 $32.4 $31.3 $28.8 $26.6 $26.1 $27.4 $23.1People 286,000 263,900 244,400 225,000 210,400 200,000+ 193,000 182,000 170,000 169,000 165,000 150,000. Countries and territories 150+ 140 142

Deloitte member firms offer clients a broad range of audit & assurance, consulting, financial advisory, risk, and tax services. Our client service teams, under the leadership of a Lead Client Service Partner, help create powerful business solutions for organizations operating anywhere in the world. This integrated approach combines insight and innovation from multiple disciplines with business knowledge and industry expertise to help our clients exceed their expectations. Problem StatementA survey conducted by Deloitte, showed more than 58% executives questioned responded that the present performance tacking approach drive neither employee nor performance. Deloitte was in need of something nimbler, real-time, and more individualized something focused on fueling performance in the future rather than assessing it in the past.Theoretical CausePresent performance management system.Objectives and targets are set for each of our Employees at the beginning of the year; after a project is finished, each person's manager rates him or her on how well those targets were met. The manager also comments on where the person did or didn't perform well. These evaluations are factored into a rating at the end of the year, arrived at in lengthy consensus meetings at which groups of counselors discuss hundreds of people in light of their peers.

Internal feedback demonstrates that our people like the predictability of this process and the fact that because each person is assigned a counselor, he or she has a representative at the consensus meetings. The majority of people believe the process is fair. The company derived from survey that Once-a-year goals are too batched for a real-time world, and conversations about year-end ratings are generally less valuable than discussions conducted in the moment about the actual performance. Deloitte arrived at its design drawing on three pieces of evidence: counting of hours, a review of research in the science of ratings, and a controlled study of the organization.Initiative of Company (to solve the problem)Deloitte tallied the number of hours the organization was spending on performance management and found that completing the forms, holding the meetings, and creating the ratings consumed close to 2 million hours a year. As we studied how those hours were spent, we realized that many of them were eaten up by discussions behind closed doors about the outcomes or the results that are to be arrived. The company came up with a system where we could somehow shift our investment of time from talking to ourselves about ratings to talking to our people about their performance and careers from a focus on the past to a focus on the future.

The second observation made was that the assessment actually produced inconsistent data. Taking into consideration the study by psychologists which provided a 62% variance in rating that could be accounted for individual raters 'peculiarities of perception. A 21% variance was only accounted for actual performance. Thus lead to conclusion that ratings reveal more about the rater than they do about the ratee. This specifically lead to question, what view is the team leader judging the team?Deloitte already has a reputation of allowing the employees to do what best he can do to improve the team's performance. Further by surveying a control group of 1287 employees 3 major observations were found that helped the company to establish a new method. My coworkers are committed to doing quality work, The mission of our company inspires me, I have the chance to use my strengths every day. Of these, the third was the most powerful across the organization. The company started to state what performance management is for firstly. It articulated three objectives for our new system. The first was It would allow us to recognize performance, particularly through variable compensation. (Current systems do this).

Second objective was to recognize each person's performance; it had to be seen clearly. Here we faced two issues”the idiosyncratic rater effect and the need to streamline our traditional process of evaluation, project rating, consensus meeting, and final rating. The solution to the former was done by making a subtle shift in the approach. Rather than asking more people for their opinion of a team member, it was found that the company will need to ask only the immediate team leader” but, critically, to ask a different kind of question. People may rate other people's skills inconsistently, but they are highly consistent when rating their own feelings and intentions. To see performance at the individual level, then, we will ask team leaders about their own future actions with respect to that person. Our third objective therefore became to fuel performance.

At the end of every project (or once every quarter for long-term projects) Deloitte will ask team leaders to respond to four future-focused statements about each team member.

  1. Considering the person's performance, and if it was my money, he/she is awarded the highest possible compensation increase and bonus [measures overall performance and unique value to the organization on a five-point scale from strongly agree to strongly disagree].
  2. Considering the person's performance, I would always want him or her on my team [measures ability to work well with others on the same five-point scale].
  3. If a person is at risk of low performance [identifies problems that might harm the customer or the team on a yes or no basis].
  4. This person is ready for promotion today [measures potential on a yes-or-no basis]. Since it allows us to quickly capture performance at a single moment in time, we call it a performance snapshot.

In an early proof of concept of the redesigned system, Professionals in one large practice area at Deloitte called up data from project managers to consider important talent-related decisions. In the charts below, each dot represents an individual; decision makers could click on a dot to see the person's name and details from his or her performance snapshots.

What Are Team Leaders Telling Us?

First the group looked at the whole story. This view plotted all the members of the practice according to how much their various project managers agreed with two statements: I would always want this person on my team (y axis) and I would give this person the highest possible compensation (x axis). The axes are the same for the other three screens.

How Would This Data Help Determine Pay?

Next the data was filtered to look only at individuals at a given job level. A fundamental question for performance management systems is whether they can capture enough variation among people to fairly allocate pay. A data distribution like this offers a starting point for broader discussion.

How Would It Help Guide Promotions?

This view was filtered to show individuals whose team leaders responded yes to the statement This person is ready for promotion today. The data supports objectivity in annual executive discussions about advancement.

How Would It Help Address Low Performance?

This view was filtered to show individuals whose team leaders responded yes to the statement This person is at risk of low performance. As the upper right of this screen shows, even high performers can slip up”and it's important that the organization help them recover. One of the most important tools in our redesigned performance management system is the performance snapshot. It helps us see performance quickly and reliably across the organization, making time engaging with our people. Here's how we created it.

The Criteria

We looked for measures that met three criteria. To neutralize the idiosyncratic rater effect, we wanted raters to rate their own actions, rather than the qualities or behaviors of the ratee. To generate the necessary range, the questions had to be phrased in the extreme. And to avoid confusion, each one had to contain a single, easily understood concept. We chose one about pay, one about teamwork, one about poor performance, and oneAbout promotion. Those categories may or may not be right for other organizations, but they work for us.

The Rater

We were looking for someone with vivid experience of the individual's performance and whose subjective judgment we felt was important. We agreed that team leaders are closest to the performance of ratees and, byvirtue of their roles, must exercise subjective judgment. We could have included functional managers, or even ratees' peers, but we wanted to start with clarity and simplicity.TESTINGWe then tested that our questions would produce useful data. Validity testing focuses on their difficulty (asrevealed by mean responses) and the range of responses (as revealed by standard deviations). We knew thatif they consistently yielded a tight cluster of strongly agree responses, we wouldn't get the differentiationwe were looking for. Construct validity and criterion-related validity are also important. (That is, the questions should collectively test an underlying theory and make it possible to find correlations with outcomes measured in other ways, such as engagement surveys.)


At Deloitte we live and work in a project structure, so it makes sense for us to produce a performance snapshot at the end of each project. For longer-term projects we've decided that quarterly is the best frequency. Our goal is to strike the right balance between tying the evaluation as tightly as possible to the experience of the performance and not overburdening our team leaders, lest survey fatigue yield poor data.


We're experimenting with this now. We want our snapshots to reveal the real-time truth of what our team leaders think, yet our experience tells us that if they know that team members will see every data point, they may be tempted to sugarcoat the results to avoid difficult conversations. We know that we'll aggregate an individual's snapshot scores into an annual composite. But what, exactly, should we share at year's end? We want to err on the side of sharing more, not less”to aggregate snapshot scores not only for client work but alsofor internal projects, along with performance metrics such as hours and sales, in the context of a group of peers”so that we can give our people the richest possible view of where they stand. Time will tell howClose to that ideal we can get.

Updated: Nov 30, 2023
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Revolutionizing Performance Management at Deloitte. (2019, Aug 20). Retrieved from

Revolutionizing Performance Management at Deloitte essay
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