The six-monthly or yearly performance review is an endangered species. And rightly so. According to Hay Group research, a quarter of business leaders view the whole performance management process as just a tick-box exercise. Instead, this outmoded management technique is being replaced by tools which enable continuous performance monitoring.
With 360 degree feedback every day, not once a year, managers can pinpoint problems and address them quickly and positive contributions can be rewarded on the spot, motivating and engaging staff right when they need it most. Constant feedback solves two key problems of traditional performance management immediately: the fact that it’s common for people to be judged on recent events rather than achievements earlier in the year and that it doesn’t include feedback of work they may have performed in cross-departmental teams.
The key driver for this change in performance management is social media, which is being used to access continuous feedback from colleagues, customers and other groups of people. Part of the push behind the rise in social performance management is the number of Millennials entering the job market, who bring with them a very different mind-set from Baby Boomers and are used to an expect constant feedback and encouragement.
But making the transition from traditional performance management system to social performance reviews is not something that happens overnight. So tread carefully.
Be clear about the behaviours and performance that you want and expect from staff and be clear about your organisation’s objectives and match employees’ objectives to those goals. The Hay Group research reveals that only 13% of organisations actually align performance management strategy to organisational strategy. Yet only when those objectives are clearly stated and communicated to employees can you have a firm basis for feedback from peers and managers and something for employees to work towards.
Social media is all about bottom-up or peer contact rather than top-down views. This peer insight can provide great additional information about individual workers, particularly in organisations with a collaborative culture. This does not mean that managers’ opinions no longer matter. Responsive managers must sift through the feedback, watching out both for people who may have a personal vendetta against someone and ensuring that those people who may not be as happy using social media as others are not penalised for their technophobia. This is a window into employee performance, not a test of their social media prowess.
For those organisations that do not have an existing collaborative culture this may be a hard sell, so don’t foist it on the most traditional departments in the business. Learn the ropes by implementing first in the most fast-moving section of the business, where the changes won’t come as such a radical shock to the system. A good place to start is to provide tools for peers to praise their peer’s performance.
This type of performance review needs a different approach by managers who are used to a more hierarchical business model. The key difference to managing in a flattened work environment, identified by Bersin by Deloitte research, is that it requires managers to coach staff rather than give orders. The immediacy of social media feedback means that managers can coach people as a problem arises, improving both their productivity and also their engagement.
It’s key to remember that peer recognition should not replace manager assessment, just provide a different view of individual’s performance and it needs to be linked into more traditional forms of performance measurement data held in your HCM platform.