We live in a rating economy where even for everyday errands such as booking a cab or buying groceries, we give an instant feedback for the service we receive. Such instant feedback helps us in getting an enhanced experience the next time. What’s more interesting is how ratings have sailed beyond the unidirectional feedback from a superior stakeholder. Today while we rate an Uber driver of their service, the Uber driver also gets to approve/ disapprove of our demeanor.
When an instant and multi-stakeholder feedback is significant for trivial tasks, should one wait for a year to get his/her professional performance appraisal done? With more companies hiring Millennials who fall under the age group 18-34, who are inclined towards this new phenomenon of ratings, annual performance review system is as good as obsolete.
It does not mean that the millennials are hostile towards performance reviews. In fact, they are highly ambitious and rely on performance reviews to set their career goals and work their way to achieve it. It is just that they want it to be real-time.
Why are the Millennials unhappy about the annual performance review system?
- They are oblivious to the annual review process as they are uncertain about how their performance is quantified at the end of the year.
- They are anxious that the expectations set might not be met as there is no frequent assessment.
- As the average time a Millennial stays at a job continues to reduce to 2-3 years, a year is too late to find out their development areas and identify training needs to improve their contribution.
- The communication gap between employees and managers in the annual performance review system prevents the employees to address their concerns promptly.
Why would an organization pull down a well-known process of annual performance review and go for a more frequent performance review?
If we consider it profoundly, providing instant feedbacks is not just a change to retain employees but is an organizational change that can help the organization grow better and survive in this fast-growing, competitive world.
Organizations like GE who are well known for their traditional annual performance review system have migrated to a continuous performance rating system. So are other well-known companies such as Adobe, Accenture, Gap etc.
But we must understand the fact that it is a substantial organizational change and cannot be implemented just to go with the trend.
How to implement an effective instant feedback system?
Needless to say, as, from the very point where we started this conversation, we can see that technology has been a major driver behind mobilizing rating economy in our day to day lives and will continue to be a critical piece in establishing this in an enterprise setup as well.
Like every major process rehaul or a behavioral change, this shift from annual to continuous performance reviews also needs intuitive technology to bring the kind of transparency, gamification and real-time access that is critical for adoption. However, aside from choosing the right continuous feedback system that is easy to use and configurable to suit the culture of your organization, it is supremely important to drive system adoption through a motivator of your choice - a carrot, stick or plain accountability. Hall of Fames and the badges we are honored in our consumer applications can be an inspiration here. But, we have often seen that there is no better way to drive adoption than to address it from the top down; start right with the CEO sharing an instant feedback to an employee.
Bringing all of it together, yes, this generation is obsessed with instant feedback. But that is not a trait to be criticized. It is time to make complete use of it to implement an effective performance management system.
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