More companies are forgoing traditional annual performance reviews—including Dutch international bank ING, MGM Resorts International and travel website Booking.com—in favor of web- and mobile-based technologies that can conduct real-time, 360-degree employee evaluations.
Officials at Impraise and Workday, both based in California, say their instant feedback apps boost productivity by allowing staff to rate each other, giving them information about how well they are doing on the job and what they need to do to improve.
Even General Electric (GE), whose former CEO Jack Welch was well-known for firing the bottom 10 percent of employees, has changed the way it reviews workers. It has an instant feedback app called PD@GE (Performance Development at GE), which is designed so its 300,000 employees worldwide can gain instant feedback on their performance 24 hours a day. The app is available on workers’ smartphones and other devices.
Experts say conducting more-frequent evaluations also appeals to an increasingly younger workforce that appreciates fast feedback from colleagues because they were raised on instant communication such as text and video messaging.
“It’s more continuous, more forward-looking and truly focuses on performance,” Amy Wilson, vice president of human capital management at Workday, told SHRM Online.
Why Wait to Address Issues?
Quick reviews help companies address issues with staff sooner.
Steffen Maier, co-founder and chief growth officer at Impraise, said his company decided to create an app that lets companies conduct real-time performance reviews because of frustration with the old-school way of providing feedback.
A yearly performance review comes way too late for a company to take steps to address an issue with an employee because the damage would have already been done, he said.
Impraise’s app allows managers to do instant evaluations of their staff, he said. And workers can use the tool to give instant feedback on colleagues, do a self-assessment or even rank how well their bosses are managing, Maier told SHRM Online.
The feedback can be used to address issues instantly or be kept in a timeline that can be referenced later when the company decides whether the employee should get a raise or promotion.
“The way a company can implement it is really flexible,” Maier said. “It can support the traditional performance review, it can support a 360-degree review, it can support manager reviews, upward and peer reviews.”
Wilson said her company's Anytime Feedback product allows companies to check in more frequently with staff. This is especially attractive to companies that do not like to do annual performance reviews.
In recent months, quite a few companies have announced they will no longer be conducting annual performance reviews. These include GE, Adobe, Netflix, Microsoft, Accenture and Deloitte.
“The annual performance review is dead,” Jim Barnett, CEO and co-founder of California-based Glint, which sells a cloud-based employee engagement tool, told SHRM Online in an interview last month. About 6 percent of Fortune 500 companies have eliminated the ranking of employees, according to management research firm CEB (formerly known as the Corporate Executive Board). Many are using technology to provide employees with instant feedback on their performance.
Anytime Feedback offers employers a more streamlined, mobile and cloud-based way to provide feedback, Wilson said.
Impraise launched about a year and half ago, and customers began using its product about 14 months ago, Maier said.
Technology Is Not Without Risks
Despite the fact that these new technologies are being touted as a way to improve a company's productivity, human resources experts warn that there are risks. Allowing managers and employees to instantly comment on the performance of each other and their co-workers in real time could lead to bullying, a more-pressured work environment or harassment, experts say.
Dr. Karissa Thacker, a Delaware-based workplace psychologist and advisor to International Paper, AT&T and other companies, compared the use of instant feedback tools to the days when e-mail first became prevalent in the workplace. Some people would send inappropriate messages, creating tension in the office, until management set clear rules on the proper use of e-mail, she said.
“This stuff is coming fast,” she said. “It is critical that human resource leaders be proactive in developing rules of engagement regarding instant feedback apps. The rules need to be developed through a partnership of business leaders and the HR function.”
Maier said that Impraise was concerned that people using their app could bully others, but the company took steps to help prevent this. Employees can flag offensive or inappropriate feedback and have human resources or an administrator handle the matter. Employees can also enter a response to feedback they feel is unclear or wrong, or if the issue being mentioned was not their fault, he said.
Wilson said the reaction to her company's product has been positive, and people who use it to comment on an employee’s performance to a group tend to act professionally and not send negative feedback. Her company's product also lets managers confidentially send constructive criticism directly to the employee, instead of to the group.
Still, companies should not just jump into using instant evaluation software, said John Jersin, a former Google executive who is now CEO and founder of Connectifier, a technology recruiting company in Newport Beach, Calif. Jersin said companies should only use such technology if its use is linked to some desired business outcome.
“Companies should take care to avoid falling into ‘ratings for the sake of ratings’ traps,” Jersin said in an interview with SHRM Online. “Sometimes businesses get really good at dramatically improving metrics that are meaningless and then are disappointed when the business doesn't improve, too.”
Greg Wright is a Baltimore-based freelance writer who has covered Congress, consumer electronics and international trade for major news organizations, including Gannett News Service/USA Today, Dow Jones and Knight-Ridder Financial News. He can be reached at GLW522@gmail.com.