In the year since I had the great privilege of becoming AIG’s CEO, I’ve sought out your ideas about how to improve our workplace and manage our business more effectively. Through the employee survey and in many other forums, you’ve asked us to rethink our performance management process.
We heard you, and so we are ending the Relative Performance Ratings (RPR) process as we know it.
Beginning with year-end 2015, we are abolishing ratings and will no longer categorize employees into performance groups. Instead, managers will have complete discretion in evaluating employees’ performance. Managers will also have discretion in determining short-term incentives (STI), so long as we stay within our STI pools and differentiate individual awards.
In assessing performance, we’ll ask managers to focus on both the “what” (actual performance) and the “how” (underlying behaviors), and consider to what extent an employee helped others be successful. We will also emphasize ongoing conversations between managers and employees on performance, as well as personal and career development.
The RPR process served us well at a time when AIG needed to demonstrate an ability to differentiate pay by performance, and it led to more honest discussions. We will continue to identify and reward those who have contributed most to our success each year.
The 2015 changes are consistent with the more comprehensive changes we have planned for 2016 and beyond, which I look forward to sharing with you in the coming months. In the meantime, please look out for an invitation to my town hall scheduled for Thursday, September 24, at 2 p.m. ET.
I’m excited about the new process, and I hope you are, too. Thank you.