Reflektive recently hosted a webinar with Meghan M. Biro, Founder and CEO of TalentCulture. The webinar can be accessed here.
Biro’s work with companies ranging from startups to global brands—including Google, Microsoft, and IBM—gives her a unique perspective on how the workplace is changing and how performance management systems are changing along with it. In addition, she hosts a popular weekly Twitter chat and podcast series called #WorkTrends, which features news and interviews with HR professionals and HR tech vendors.
A key point of the presentation was annual performance reviews. Many companies still hold performance reviews on an annual basis, which was backed up by a live survey of the webinar audience.
When asked, “How frequently are performance reviews conducted in your workplace?”, 60.7% of respondents said that reviews are conducted annually. 11.5% responded that reviews are Bi-Annual, while 14.8% said their company holds reviews every Quarter. Only 1.6% of respondents said that reviews are conducted Monthly. However, 11.5% of the audience said that their companies Never conduct performance reviews, choosing to do away with the traditional system.60.7% of respondents said that reviews are conducted annually. Click To Tweet
Despite their popularity, Biro asks us to consider annual reviews through the lens of changing workplace dynamics. The Deloitte Global Human Capital Trends report found that half of companies surveyed reported a significant number of contractors in their workforce, while 23% reported freelancers and 13% reported gig workers. This data reflects the shift from a static hierarchy with long-tenured, in-house employees to a diverse, flexible workforce comprised of talent all over the globe.
Deloitte refers to this new structure as a dynamic ecosystem, and companies need a robust performance management system that’s equally dynamic. In that spirit, Biro presents her seven keys for more effective performance management.
Why Outdated Performance Review Systems Prevent Employee Growth and Damage Performance
The Growth Divide study from Reflektive and Wakefield Research found that more than half (54%) of employees feel anxious or stressed during their performance review period. Anxiety was highest among younger employees—with 63% of Millennials and 52% of Gen Xers reported review-based anxiety.
When performance is reviewed only once per year, employees lack a clear understanding of where they stand. Are they going to get good or bad news during their review?
This uncertainty leads to anxiety for the majority of employees, which prevents them from doing their best work and, ultimately, can make annual reviews counterproductive.63% of Millennials and 52% of Gen Xers reported review-based anxiety. Click To Tweet
How Delaying Periodic Reviews has a Toxic Effect on the Whole Organization
The Growth Divide study also found that nearly 60% of executives have delayed or postponed performance reviews because they didn’t have enough time to prepare. Nearly one in four execs have delayed a review for an entire month or longer.
Perhaps that’s not a surprise considering that executives spend an average of 15 hours outside the office preparing for reviews, on top of their already heavy workload. Meanwhile, employees are left waiting and wondering. Rumors can spread and employees may feel devalued or lose faith in management.
How to Create a Vibrant, Continuous Feedback Loop that Works
Even when annual reviews are conducted on time, they’re still too late for effective coaching. 67% of company executives admit to removing negative feedback from an employee evaluation because too much time had passed to bring it up.
Even if the feedback was valid and would have provided an important teaching opportunity, it’s simply taken off the table. That helps explain why 62% of employees feel the feedback in their performance evaluations is incomplete.
Continuous two-way feedback between managers and employees makes these coaching conversations part of daily life in the office. Biro says that feedback should be save-able, archivable, and sharable, so that it can be easily referenced for performance reviews. Feedback should happen in real-time—right when wins or losses occur—and tools should be integrated with Gmail, Slack, and other workflow systems.
Most importantly, employees should have the capability to request feedback from their peers and managers. This will foster a sense of transparency and trust in the feedback process, while encouraging collaborative problem-solving.62% of employees feel the feedback in their performance evaluations is incomplete. Click To Tweet
How Continuous Feedback Builds a Solid Bridge of Trust
Biro calls trust the “special sauce” that sparks long-term engagement. A Gallup survey found that 60% of Millennials are open to another job opportunity—they want their current employer to give them a compelling reason to stay.
If employees believe that their company has their best interest at heart and is invested in their growth, they’re far more likely to stay committed.
In the webinar, Biro breaks down five components of great feedback:
Credibility and accountability: Companies keeping promises, acknowledging both mistakes and successes, providing debriefings, status reports, and meeting agendas, and working on shared goals.
Follow-through: Managers must follow up with employees about goals and reviews.
Honesty: Providing a high caliber of feedback that is constructive, clear, and truthful, even when that’s difficult. Biro urges management to tell the truth, not just what people want to hear.
Supportiveness: Show support and understanding of team members, even when mistakes are made.
Recognition over retribution: Biro cited an IBM study that revealed the engagement level of employees who receive recognition is almost three times higher than the engagement of employees who don’t.
How Modern Performance Management Tools Empower Your Executives and Managers
In a survey, the fourth most-common mistake cited by HR personnel was not seeing employees as human. Digital tools can actually help to humanize employees, by increasing feedback and check-in conversations that strengthen relationships between management and employees.
In addition, analytics tools can help leaders make more informed, data-driven decisions regarding processes and company culture. Biro believes that these virtual tools can lead to better, “more human, more humane management.”
Why Two-Way Continual Feedback Transforms the Work Culture
The Growth Divide survey found that 74% of office professionals believe they’d be more proactive in bringing up work problems to their manager if they received more frequent feedback.
Feedback should build on itself until it becomes a vital part of your company culture. Again, employees want to know that their company is invested in them. They want to know the “why” in their work—how they fit into the company’s vision.
Continual feedback and frequent check-ins can help inform this “why”.
How to Measure and Leverage Results in Real-Time
Another live survey during the webinar asked the audience, “What do you wish was part of your organization’s performance management system?” The responses broke down like this:
- A way to provide and share recognition in real-time: 2.1%
- A channel for frequent feedback and continuing discussion: 43.8%
- A place to establish goals and then revisit them and reevaluate: 22.9%
- A way to better connect managers and employees: 31.3%
This desire for “frequent feedback and continuing discussion” was reflected in the Growth Divide study, where 51% of office professionals said they would prefer to have check-ins at least once a month and 94% of office professionals said they want their manager to address mistakes and development opportunities in real time.
DOWNLOAD FREE E_BOOK: How to Transition Annual Reviews to Real-Time Feedback
Real-time feedback software helps make check-ins and development conversations part of the daily workflow, and the right analytics tools should present information in intuitive, customizable formats to help leaders make data-driven HR decisions.
Meghan Biro concluded the webinar presentation with the following: “Changing your performance management system changes the culture. It can increase performance, engagement and alignment, reduce turnover, and radically improve outcomes and results.”
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