A trend is beginning emerging among larger companies where the annual staff appraisal is being dumped in favour of continuous performance management. Companies such as Microsoft, Deloitte and Accenture are some of the bigger ones making the move, and so far it appears to be the smart choice.
Globoforce found that 53% of employees say yearly reviews don’t motivate them to work harder. Conversely, Tower Watson found that 43% of highly engaged employees receive feedback at least once a week, and Gallup released a report stating that employees who receive strength-based feedback were 12.5% more productive.
The preferred appraisal method is now one of constant communication – and it makes sense. Why should employees have to wait for one moment each year to understand how they’re performing? How will the employer (or employee) be able to recall all the rights and wrongs of the year past? Traditional annual appraisals have become too unwieldy, and ultimately end up becoming a conversation about pay. The conversations have ceased to be an opportunity to talk about skills gained, or growth opportunities sought, and even when they are, there’s too many topics mixed up, so all you get is a meeting that doesn’t do much.
It’s clear that just the way yearly appraisals are conducted don’t currently work, but that doesn’t mean the continuous feedback model we’re moving into is perfect either, and a proper strategy needs to be adopted to succeed.
The frequency of reviewing employees’ performance depends on a company’s culture, so may happen weekly or at the end of each project or assignment, for example. Regardless of when it happens, companies need to aid line managers in facilitating continuous feedback.
Three ways to do this include:
- Encouraging real-time observations on performance – this could be done in person or easily done through mobile devices on tools such as Cornerstone Mobile. Whatever solution is chosen, the main thing is to ensure it is kept simple to not impact line managers’ time too heavily.
- Peer reviews –which could be gamified to increase engagement among employees. Having such feedback is a good way for line managers to gain insight into performance indicators they may otherwise have missed. Badges could also be given to recognise regular good work.
- Skills recognition and upgrading – this could be done in the style of LinkedIn’s endorsements, or a similar online platform. This could help line managers encourage employees to both teach and learn new skills from their colleagues depending on their strengths and weaknesses.
A word of caution, however, is that it’s still important to dedicate time to evaluate and consider employees’ career. While detaching the performance review from the yearly appraisal is a good idea, it’s necessary to keep a structured time to carve out and evaluate career progression and plan for the future. This forward-planning aspect can be kept to a more infrequent time period, such as bi-annually or annually, as long as day-to-day performance feedback happens often.