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What does the future hold for the annual employee review?

8th January 2016

Accenture, Deloitte, Adobe, Gap, Microsoft, and GE.
 
What have all these corporate beasts got in common with one another? They’ve each changed the ways in which they conduct the archaic annual employee review – some have even completely done away with it.
 
It’s unsurprising really. Just the mere mention of an up and coming annual review would likely strike fear into the most confident of corporate employees – hell, even the managers administering them would often have the same feelings of dread.
 
But what is it that makes the annual review so daunting? And why are corporate organisations now finally deciding to dramatically change them? Let us help explain. First we’ll begin with the problems…
 
 

Problems

Let’s get the obvious one out of the way first. Once a year is just too long a time frame when it comes to employee feedback in today’s workplace. The workplace is soon to be dominated by a new generation of workers (Millennials, Generation Z), workers that are not afraid to hop from job to job (in fact a recent study from Adecco Staffing revealed these generations see a year as being enough time to spend in one role before leaving) and workers who crave consistent and regular feedback.
 
 
Feedback once a year just doesn’t cut it anymore.
 
 
A whole year of a work is also very difficult for managers to analyse. As a result, what tends to happen is the reviews / assessments undertaken by the managers, ultimately end up focusing on the individual, rather than their performance at particular tasks.
 
The above is made even worse because it has be shown that the outcome of an annual review is influenced more by the characteristics and traits of the administrator, rather than by the person being analysed.
 
Furthermore is the fact that organisations have little in the way of identifying the good evaluators, nor – and probably more importantly – the bad ones!
 
 
Hopefully it’s now clear as to why when it comes to the annual review, change is very much needed. Now we’ll take a look at how we think the annual employee review should evolve.
 
 
 

The future employee annual review

 
The relationship between an employee and their manager(s) is shifting. An employee used to view their manager(s) as an expert, and so the person to go to when they needed certain, specific information. But now with the wealth of information employees have available to them at their fingertips, they want their managers to perform a different kind of role – that of being a coach and mentor.
 
The above actually leads us nicely into the key element all employee reviews now need to focus on: Learning.
 
Employee reviews need to move beyond simply rating people (which inevitably often turns into criticising), to being about developing people. Giving employees a grade or score is useless; organisations instead need to give them a goal(s), and then frequently monitor, support and coach, to help them achieve the set goal(s).
 
Simply, today’s new generation of workers want to be continually learning and developing in their role. And employee reviews need to become a crucial tool that organisations use to allow employees to do so.
 
Timely. Open. Frequent. That is what employee reviews also now need to be. They need to be providing ‘in the moment’ feedback, so that employees can actually implement the feedback and learn from it. Feedback in this way is so much more beneficial, as employees know the feedback is for learning, rather than analysing/criticising them as a person, which is what annual feedback can often be seen as. This change in the delivery of feedback means that employees are not only keen to receive the feedback, but they actively seek and demand it.
 
It’s worth pointing out that the feedback should not solely be related to the employee’s personal goals, but also to the bigger goals of the organization. This ensures the feedback also focuses on another driving factor of employee engagement – purpose. A strong sense of purpose is what employees desire in a role, and so employee reviews can help constantly communicate and enforce the important role each employee is playing.
 
One other thing that is changing the employee review is technology. Technology is what is improving the feedback process, enabling it to become more ‘in the moment’.
 
GE is one such company making good use of technology to improve employee feedback. They have developed an app called PD@GE (Performance Development at GE). The app allows managers and anyone else in an employee’s network, to leave feedback and ‘notes’ on the performance of the employee. These ‘insights’ are available for the employee to access 24/7 on mobile devices.
 
However, the really interesting thing is that GE’s new app hasn’t meant that they’ve done away with the annual employee review; they’ve just improved it – They have taken a hybrid approach.
 
Taking a hybrid approach means not only do employees receive the open, frequent, immediate feedback that they crave. But it also arms managers with the performance data they need to evaluate the employee more effectively on an annual basis.
 
Plus, because the employee receives feedback from their whole network, there is less chance of bias creeping into the feedback on the part of the manager, as they have a richer data set to draw on.
 
Consequently, the review becomes more about performance, less about the individual.
 
 

Conclusion

It is clear that organisations need to address the methods they use to undertake annual employee reviews. But should organisations follow Accentures lead and scrap them completely? Or take note of GE’s way, and take a hybrid approach.
 
We guess that’s a decision each and every organisation needs to make for themselves. One thing they should remember when deciding however, is that the future employee review should not be about evaluation, but about learning.
 
Until next time…
 
Rima
 
 

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