Exaserv Blog

Most of us who had the privilege to lead also had the responsibility of the (dreaded) annual performance review. We’ve all had experienced them, but not many look forward to it. These reviews can be stressful for both parties involved which is unnecessary, and there is a better way.

According to the Society for Human Resource Management, and as reported in Slate, “95% of employees are dissatisfied with their company’s appraisal process. What’s more, 90 percent don’t believe the process provides accurate information.” Worse yet, an Adobe study found that performance reviews have no effect on how they do their job. Is the only reason why we keep it, is because we’ve always done it this way? That isn’t reason enough.

So, why do we keep doing them? In large part because we’ve always done them. We’ve been conditioned by 20th Century corporate culture to accept them as the norm. And, to be blunt, most people are just shamed into doing them. “What? You don’t do yearly performance reviews? Are you afraid to?”

It should be no surprise that the practice of traditional annual performance reviews is finally being abandoned, given the fact that the world of work looks very different than it did when the annual performance appraisals first rose to prominence in the 1940s. We, humans, tend to create practices designed to address the situations we face at a specific point in time but then cling to those same practices far beyond their useful life, until they actually become counter-productive.

The Real-time 360
The rate of progress, market, and technological change have made a yearly review unnecessary. Using feedback on performance to course correct once a year, or even twice a year, is akin to trying to navigate a minefield by reviewing your performance after you’ve crossed it. It’s not entirely ineffective for some, but there will be far more casualties among those who need feedback at the moment. But how can you possibly deliver feedback on a daily basis to everyone that reports to you? Especially in a small or medium-sized company where time is already at a premium.

This is how it works
Rather than have one person determine how well someone has performed once or twice a year, a real-time 360 relies on the perspectives of everyone that a person works and interacts with on an ongoing basis.

This may sound tedious at first, but the reality is that once set up it is infinitely simpler and more effective than any form of periodic performance management.

What is radically different is that you can define the universe of people that will be reviewing other people. In a small company (under 50 people) you could set this up so that everyone is literally evaluating everyone else on an ongoing basis. Not everyone will rate everyone else daily. Instead, everyone has the ability to rate anyone else whenever he or she desires. Over time the regular feedback creates a trending function that shows how certain behaviors and actions correlate to feedback.

A few things are critical if you are going to do this:

1. Support Employees
Have qualified people to review the initial feedback in the baseline 360 with each employee. As I said earlier, seeing yourself in this sort of unfiltered light can be harsh and difficult to rationalize.

2. Culture
Focus on the value of creating a culture that regularly promotes the value of the real-time 360.

3.  Don’t anonymize
There’s much debate over this point. Some people feel that anonymizing encourages drive-by criticism. My experience has been that some of that will show up, but if the 360 is done right then overly negative feedback will be drowned out by more accurate feedback from many more reviewers.

4. Review up as well as down
The 360 is one of best tools I’ve ever come across for the growth and development of leadership skills. Leaders rarely get accurate and unfiltered reviews from those who they lead. The 360 is nothing short of eye-popping for leaders. This is who you are perceived to be, deal with it!

5. Recognize and provide incentives to people for participating in the process
These are not financial incentives but rather acknowledgments for being engaged in the process and supporting it. Be sure to do this in a way that maintains anonymity in order to preserve the integrity of the 360.

6. Mandate participation
 We know 360s irk some people who just do not want to participate, either because they don’t like seeing how they are perceived or can’t be bothered to help others grow.  The 360 will create a culture that is constantly learning and growing from the shifting obstacles and opportunities that your team needs to navigate in order to learn, grow, and succeed.

There is a hybrid version of the classic annual performance review and the real-time 360 where you eliminate the mid-year. With Continuous Performance Management form SuccessFactors you can have a combination of a formal annual review and real-time feedback in between support by logged activities and accomplishments. All supported with an easy mobile app and robust system administration. Interested to explore what would work within your organization? Let us know and we are happy to share our expertise and experiences at other companies.

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