A recent article in The Times reported that Goldman Sachs is scrapping its annual performance appraisal system.  From the article it appears that standard GS procedure has been to meet with each employee annually for an appraisal and, in that meeting, grade each member of staff on a scale of 1-9 for performance.

The article reports that this system has been universally unpopular with both managers and staff. - Any guesses as to why it might not work?

Well to start with, if you give staff formal feedback only once per year, the boss will be collecting their evidence of things the employee has done wrong for potentially over 11 months before she gets told about it!  So after the first time it happens the poor employee will be looking at their boss wondering what they are saving up for next year.  Then by the time she gets told, it is way too late to correct the mistake.  And while the conversation is focussed on feedback from last year it leaves no opportunity to discuss how the situation could be managed better in the future.  Bosses feel the embarrassment of the situation just as keenly as staff, creating a difficult situation for everyone.

Anna Wildman published the CEDAR model in 2003 as a mechanism for giving good feedback in the workplace.  The CEDAR acronym stands for:

Context - Explain the importance and the impact of the activity that’s not working

Example - Provide specific examples of it happening

Diagnosis - Ask for the employee’s view, and have a joint discussion about why it is happening

Actions - Ask the individual what they will do in the future, if possible avoiding giving your own suggestions

Review - Set a date for review.

In this way you communicate the problem, engage with the employee supportively in working out how it could be done better and yet put the onus on them to make it happen.

When dealing with a child or a dog you have to learn to correct bad behaviour instantly, and then to move on without holding a grudge.  What is often misunderstood with adults is that if you want to be fair you do the same.  But though it isn’t always practical in the workplace to deal with issues instantly, at least it is still important to get to it as quickly as possible.

Goldman Sachs is changing to an online system where staff can be given feedback continuously throughout the year, which has to be much more humane for everyone.  Even better would be a weekly one-to-one with each member of staff – a brief meeting but long enough to give praise for a good job, and work through CEDAR for any issues.


If you are interested in learning more about CEDAR or managing people in general why not attend our Managing and Appraising Performance course.