How continuous performance management can crowd-source reviews and drive productivity

The system of performance reviews can be skewed by just a manager’s opinion and the ‘recency effect.’ Bringing in more people and being transparent can help companies perfect standards.

Performance reviews play a pivotal role in taking an organisation forward. Yet most companies today have a very weak system of reviewing employee performance. Generally, performance reviews are lopsided and don’t give a complete picture of the work done throughout the year. 

In a recent survey, Deloitte’s Global Human Capital Trends reported that 70 percent companies were in the process of reinventing their HR performance management process. Just a year later, 76 percent companies surveyed reinvented their performance management to be more continuous. Organisations are realising that the old way of doing performance management no longer works.

In the absence of a uniform policy on a performance review, managers don’t have a holistic view and it becomes very difficult (and ineffective) for them to rate employees. But since they have all the power, it is not uncommon to see their personal biases come into play. Thus, most of the time, employees don’t know what is coming, and dread reviews. 

There are companies that rush through reviews without considering multiple factors that can indicate how well an employee has performed. Though most factors are supposed to be covered in an annual performance, people tend to forget everything about the employee and limit the report to their performance in the last few months.

This factor, known as ‘recency effect’, paired with other loopholes, leaves employees at the mercy of a broken system. With such a distorted process in place, all the hard work done by employees throughout the year goes in vain. This ruins employee morale and gives them fewer reasons to work harder or improve, affecting the company’s growth. 

For the people by the people

In order to increase productivity, the organisation needs to increase employees’ visibility of their own performance. Decentralising the performance management processes can help them achieve their deliverables.

Employees have diverse skill sets and expectations; however, they are limited to a function with narrow, predetermined responsibilities. Considering that each employee is different, it is not easy for HR teams to focus on individual careers. 

HR leaders can’t be expected to keep track of everything that everyone is doing. But if the HR teams can’t, then who can?

It is the employees who understand their career plans better than anyone else. Thus, it is best for organisations to devise a review system where employees themselves have the strongest voice. Such a democratic workplace can give employees more control over their career paths. In the long run, this translates into higher productivity for employees as well as the company.

Anindya Shee, VP of talent management and HR tech at Cipla, says, We need an aspiration-linked, strength-based approach to career and performance management. Organisations will need to do much more to be cognizant of people’s choices, interests, and skills. The sooner they realise and start doing this, the better.

Organisations can look at the following steps to create a more conducive environment for employees:

Give them instant and accurate feedback

Giving real-time feedback to employees enables them to make changes as required. This ensures that course correction can happen on-the-go, and preventing uneasy conversations during their performance reviews.

Regular feedback keeps employees aligned with their goals and it helps them improve the quality of their work.

Gina Lewis, group HR advisor at a large Indian diversified conglomerate, says, Employees want feedback that is accurate, real-time and constructive. Performance systems in most companies, however, fall short of these expectations. They have instead become a means to fulfilling one important ‘to-do’ for managers and HR – ie. helping them determine how to distribute their annual compensation budget. There is very little ‘management of performance’ for the individual in this process.”

Currently, the opinion of the manager dominates that of others, thus the review derived is not wholesome. To get a well-rounded picture of an employee’s performance, the system can include inputs from departmental colleagues, subordinates, senior management, and others that he or she regularly interacts with. Customer surveys can also be an important source of information in this context. This helps balance bias (if any) in the manager’s opinion and improves data reliability.

Make the system transparent

Keeping the employee in the dark about their performance review only results in confusion and low productivity. When employees are aware of the overall feedback, they can understand the areas they are good at and where they need to work more. This also makes them better prepared during their performance review discussion. 

A transparent system accounts for complete information, which the manager can easily refer to in order to give a meaningful review and discuss the next steps for employee progress.

The final word

An employee performance system, which considers all these points, can drive employees in their career paths. This equips the company to plan its resources in a much better and more efficient manner. In the long run, this can add to the data on the kind of employees who would best fit in the company’s culture. 

Today, companies are seeing the merits of a continuous performance management system. As more companies adopt it, they will drive growth and remain ahead of the curve in an ever-changing business ecosystem. 

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)

(Edited by Suruchi Kapur-Gomes)