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Hate your Annual Performance Review process? There's a better way: Continuous Feedback

Posted December 12, 2016

Merry Annual Performance Review Season! Hope you are enjoying the peace, happiness and festivity which always accompanies your annual performance review. What? You don’t love the annual performance review process? Join the club.

Everyone hates the annual performance review process. It consumes an enormous amount of time as employees complete the various assessment forms and conduct review meetings. It distracts the organization from pursuing its core mission. And for what benefit? Employees find limited value from the process. Managers do have a way to evaluate their direct reports, but it is information they probably had already anyway. Any benefits from the traditional annual performance review are intangible and diffuse, since the process is built for companies, not for employees or managers.

More and more companies have realized the limitations of the annual performance review and are transitioning to something different. Employee performance feedback is evolving from an annual event in December to continuous feedback that occurs throughout the year. The new focus is on individual improvement and professional development, rather than performance deficiencies gathered to defend pay and termination decisions.

Many intuitive and easy-to use tools have been developed by dozens of companies to facilitate this new form of employee performance feedback. The most effective tools provide a mechanism for offering feedback in real-time, on a continuous (or at least regular) basis, and are “frictionless”, with limited intrusion into daily workflows.

Everyone feels the pain of the traditional annual performance review

Ask around. Very few people can honestly say they enjoy their annual performance review. Even in a year of strong performance, few will say that the results of the process are worth the time involved. Even back in 2013, Bloomberg was already calling the annual performance review a “worthless corporate ritual.”

For employees, the frustrations are numerous. More recent accomplishments (and errors/failures) tend to weigh much more heavily than results generated earlier in the year. Work completed earlier in the year often escapes without any feedback from peers or managers. And with the introduction of 360 reviews, now need to complete both a self-assessment as well as several other assessments of peers and managers. Even for an employee with no management responsibilities, the annual performance review can now require up to an entire day to complete.

For managers, the Annual Performance Review process requires dozens of hours of time to complete assessments for direct reports, and to schedule and hold meetings with each. For some managers, the process can easily take several days to complete. The benefits for managers are limited – much of the information uncovered during the review process is already known to the manager.

For HR, the Annual Review process represents another occasion to be viewed as the “policy police” rather than a strategic partner to the organization. HR professionals lead and facilitate the performance review process, which really means their primary role is to follow up with the laggards who do not submit their paperwork on time. Instead of serving as just the policy police – or perhaps even worse, the “process police” – HR ought to be focused on supporting the organization to improve the collective talent of the organization.

There is one entity that benefits from the traditional annual performance review: the organization itself. The documentation throughout the annual review process provides a paper trail to justify pay and employment termination decisions. But at what cost? The frustrations of all other stakeholders in the process outweigh any small benefit of lessening legal risk. And paper trails can be generated by processes other than a formal annual review (like continuous employee feedback described below.)

The traditional annual performance review process benefits the company, not the employee or manager. So, it’s not surprising that so many employees experience such frustration from the process. From an employee’s perspective, the annual performance review is used primarily as the way to differentiate pay between employees, and importantly, to document poor performance if the company needs to terminate employees. Annual performance reviews are not focused on employees’ personal improvement or professional development. And the vast amount of time spent on the process represents an enormous distraction to the organization, at a time when a week of work can make or break the year.

A Better Way: Continuous Employee Performance Feedback

Many prominent companies have recently ditched their annual performance reviews in favor of Continuous Employee Performance Feedback, including Accenture, Adobe, Booking.com, Dell, Deloitte, Eli Lilly, Expedia, GE, Google, ING, MGM Resorts International, Netflix, Twilio, and VMware, among many others. And with hundreds of other companies currently in the process of re-evaluating their performance management processes, the annual performance review process is at best an endangered species of “worthless corporate ritual”.

These companies who have ended their annual performance reviews have moved to monthly one-on-one conversations (about making each employee happier, more engaged, and more productive at work) or weekly check-ins, or quarterly review meetings. The frequent check-ins are typically facilitated by a technology solution, and often are supplemented by periodic “pulse” surveys to gauge the climate of the work environment and/or the engagement level of the employee population. Other tools provide electronic “high fives” or “well dones” or even brief notes on performance accomplishments or failures.

Frequent feedback appeals to younger generations of workers who appreciate instant feedback on the significant work projects they complete. Millennials have grown up with real-time communications like instant messaging and video calling. They actively use on-demand applications like Uber, which provides real-time services, and requires immediate feedback for drivers and passengers after each interaction.

Frequent feedback is focused on employee performance improvement and professional development. The most effective technology tools recognize the additional time required by this frequency, so optimal solutions are as frictionless as possible and minimally intrusive to daily workflows.

New tools facilitate continuous feedback

Dozens of technology solutions exist to facilitate continuous employee feedback. Enterprise HRIS vendors like Workday, Peoplesoft/Oracle and SAP all have added real-time employee feedback modules. Newer cloud HRIS vendors such as Zenefits, Gusto and Namely have added similar tools to their suite of services. And dozens of startups like BlinkEval, Glint, Impraise, HighGround, Engagedly, and Reflektive have emerged to provide different solutions to this new evolution of performance management.

So how do you choose the right solution? The key to effective tools is to find the right frequency for feedback for your organization, and ensure that it fits into the current employee workflow with minimal friction. Test various tools among small workgroups – or let each workgroup research and choose their own preferred tool – and select the right solution for your organization.

Our Perspective

The trend is clear. Employee performance management is rapidly evolving to emphasize speed and frequency of feedback. Traditional once-a-year annual performance reviews are archaic and dying in their current form. They may survive, but only in conjunction with a continuous feedback approach to ensure that employees get the feedback, coaching and redirection they deserve.

BlinkEval is a free continuous employee performance feedback tool. We integrate with employee calendars, so that each scheduled call or meeting becomes an opportunity to provide quick and easy constructive feedback to all your colleagues, and receive feedback in return. And our solution is FREE (for all individuals and for the first 100 employees of each company). BlinkEval is the easiest employee feedback application to integrate into your current system right away. Please visit us at www.BlinkEval.com to learn more.


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