Annual performance reviews and numerical rating systems are evolving into real-time feedback and “check-in” sessions that are less formal, less threatening and more transparent for employees.
Global companies are overhauling employee evaluation systems and changing performance measurement to retain top talent and develop future leaders by providing instant, personalized and continuous, effective feedback that caters to a new workforce that craves transparency.
Real-World Change: Revamping Annual Performance Reviews
Global companies including GE, Accenture and Microsoft have swapped traditional annual performance reviews with new measurement systems that help determine pay raises, bonuses and promotions.
Why?
In 2015, management research firm Corporate Executive Board (CEB) found that more than 9 in 10 managers were dissatisfied with their organization’s annual performance review process, and nearly 9 in 10 HR leaders said the current process didn’t provide accurate information, as noted in a 2015 article published by the Society for Human Resource Management (SHRM).
That same year, GE ended formal annual reviews companywide, affecting approximately 300,000 employees at the time. Instead of end-of-year evaluations, the company’s new process called for more frequent conversations and use of a new app to help managers and colleagues share feedback.
According to the 2017 Global Human Capital Trends report by Deloitte, 90% of organizations that redesigned performance management saw a direct improvement in engagement, 96% processes have been simplified, and 83% claim the quality of conversations between managers and employees has improved.
Real-Time Feedback: The Success of Micro-Coaching & Weekly Check-Ins
Rather than filling out piles of forms and packing in 12 months of information into a single annual review, many companies are implementing micro-coaching opportunities.
Microsoft has implemented “connect sessions,” which focus on an employee’s impact on coworkers, the team, the company and customers, according to a 2017 article published by SHRM.
In 2015, Deloitte redesigned its entire performance management system, calling for weekly check-ins with team leaders, which allow real-time coaching about projects and feedback regarding performance, states a 2015 article published by the Harvard Business Review.
Crowdsourcing: Growth in a New Platform
Companies of all sizes are implementing crowdsourcing platforms that allow employees and managers to provide everything from compliments to constructive criticism in real-time via their smartphones. A variety of talent management apps such as TINYpulse, Snapshot, Waggl and TheEMPLOYEEapp collect, store and analyze employee feedback, providing employees with a broader view of how they’re performing and giving leadership information on employee happiness and engagement.
For example, the TINYpulse platform, which has been used by Deloitte and Hubspot, anonymously asks employees one open-ended question at a time, at least once a week. By taking this approach, management can better understand employee satisfaction and determine trouble spots within the workforce.
Snapshot, which has been piloted by PwC, allows employees to request feedback through the app, as reported in a 2017 article published by the Chicago Tribune. PwC’s program allowed employees to ask managers about their progression and performance in real-time as opposed to waiting for a weekly meeting.
Rethinking Evaluations: Considering New Metrics
Whether it’s quick check-ins or gathering informal feedback on a mobile platform, recognizing accomplishments, strengths and development areas can help provide objective information for pay raises, bonuses and promotions that no longer rely on rating systems and year-end-reviews.
According to Accenture’s Chief Leadership and Human Resources Officer, Ellyn Shook, organizations don’t need a rating system.
“You need a rich set of inputs, understanding of skills, market values, contributions and how they will grow the next year,” Shook said in a 2016 article published by the Chicago Tribune.
The key to revamping an outdated process is to rethink how employees should be evaluated moving forward. According to Stephen Balzac, president of the organizational development firm 7 Steps Ahead, best practices for creating new metrics for the modern workforce include:
- Removing all checkboxes and numerical scales
- Providing feedback on things employees can change rather than personality traits or characteristics they can’t change
- Including specific incidents and examples when giving negative feedback
- Eliminating any communication that insinuates competition between team members
- Focusing on strengths more than weaknesses