Posted on 11 Nov 2016

At the start of the year I sit my young children down at the kitchen table and explain what I want them to achieve over the next six months. We write down their objectives and then six months later I review their progress and give them feedback.

Sound silly? Of course it does! From a very young age we are given continuous feedback from our parents and teachers. What a shock then to enter the workforce later and get hit with the traditional performance management process.

The winds of change are upon us, however. A number of companies are moving away from the annual performance appraisal. Some have abandoned it altogether. Many suggest it fosters disengagement. Performance reviews are generally held in universal disdain – they can be confronting and awkward.

But has the pendulum swung too far? In abolishing performance reviews some companies have also ceased the meaningful feedback and conversations that are key to engagement. Employee performance is 10% lower in organisations without performance reviews and employees feel less engaged.1 The key is to find a happy medium. Rather than abandoning performance reviews, companies should strive to reimagine performance management so that ongoing feedback, recognition and improvement become the driving themes.

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Ok, so what’s the reality?

Many organisations still struggle with performance management. Is your company one of them? Don’t worry you’re not alone.

We recently asked our clients for feedback on their performance management processes. We found that, despite an increased awareness of the need for continuous feedback, managers are struggling to make it a reality.

Even with tools to facilitate continuous feedback, 40% of managers don’t find it easy to proactively provide employees with ongoing performance input. Why is this happening? The short answer is technology is not enough. Having the technology to capture feedback quickly and easily doesn’t mean managers find it any easier to have difficult conversations. Managers need training and support to deliver meaningful feedback conversations. Yet, only 39% of companies train managers in effective feedback techniques.2

Improving the quality and frequency of the feedback has a profound impact. Companies that help managers learn the skills of feedback are 57% more likely to experience above average productivity and 36% more likely to see an improvement in the employee experience over the past 12 months.2

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And what do employees think?

The rise of technology in our day-to-day lives means employees expect a similar ‘switched on’ experience at work – and the performance management process is no exception. Employees want a simple, seamless process that provides feedback and recognition in a timely manner.

We saw positive outcomes from the employee’s perspective. For 75% of employees, using modern HR technology improved the performance management experience as it enabled meaningful discussions with their manager.

A shift in the uptake of continuous feedback is also occurring. Employees are embracing the idea and using mobile-optimised HR technology to capture on-the-spot feedback and link it to their performance goals in the system. Year-on-year we’re seeing an increase, with 68% of employees now capturing both formal & informal feedback on-the-go. Seeking feedback from various sources such as customers, peers and direct reports provides a richer learning and development experience for the employee.

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Taking the next step

The current swing away from annualised performance reviews and ratings has been criticised for its lack of transparency. We’ve found that it doesn’t have to be an either/or situation. Putting in place a solution that supports both formal objectives and reviews, coupled with continuous point-in-time feedback has increased transparency of the process for 78% of employees.

So if you do decide to embrace continuous feedback and roll out a technology solution that supports it, don’t just sit back and hope for the best. Support your managers to have the ongoing conversations while implementing HR analytics to guide and measure performance. The benefit? Continuous feedback and recognition drives engagement and increases productivity.

References:

  1. Patty, A. Drift Away from Performance Reviews Backfires: Study. s.l. : http://www.smh.com.au/business/workplace-relations/drift-away-from-performance-reviews-backfires-study-20160706-gq03kt.html, July 9 2016.
  2. Lombardi, Mollie. http://www.aptituderesearchpartners.com/2016/10/24/culture-fit-no-place-id-rather-be/. 2016.