The ideas for organisations to utilise the continuous feedback process could be observed in the generation of digital technologies and digital business models mainly all over the globe.
As per a main HBR article published in October 2016, it can be explained that the initial part of continuous feedback was in 2002, when an organisation named Colorcon discontinued its practice of annual performance reviews and followed the same with executives giving people instant feedback, tying it to specific goals and giving out small weekly bonuses to workers they saw doing good things.
Interestingly a period later Facebook Head of HR, Lori Goler2 published an article in HBR which talked about why Facebook is managing performance evaluations. This created an interesting distinction between the special review process and its outcome.
A year earlier Deloitte had written an article discussing their improved HR software method in which they claimed that based on analysis done in 2000, it was discovered that 62 per cent of the variance in numbers could be considered for individual raters characteristics of perception.
The analysis further asserted that actual performance accounted for only 21 percent of the change. The research thus decided that though the completion rating implicitly understood that they are covering the performance of the rate, in reality, they also tell us about the rater.
The above clearly shows the debate on the next-generation performance management method is far from over, though we seem to be approaching an agreement about the use of continuous feedback mechanisms in the manner while the overall method and its outcomes are still created and redesigned by organizations as per their interest and industry realities. Some surveys indicate that about a third of American companies have abandoned annual performance reports and replaced the same with continuous feedback.
The incentives for companies to use the continuous feedback process could be found in the generation of digital technologies and digital business models that are there all over the globe. With B2C apps asking for direct feedback on the quality of service or experience, companies started to ask why not build this inside the company too.
As we move in this class economy businesses, have found value in not just the ratings but also the nature of the raters, thus creating a second loop dynamic. As businesses are looking to adapt the constant feedback culture, two trends seem to be developing – one that obviously leads to “Employee Engagement” and another one that connects to “individual performance
Employee Engagement and Continuous Feedback
In growing economic circumstances linked with talent rarity, one of the top objections worrying business leaders today is of employee engagement and retention. Traditionally organisations carried annual employee engagement surveys and benchmarked themselves upon peers to identify with best methods that made them “best place to work”.
As organisations look to discuss the issue of employee engagement, they understand that it’s a very complex issue with as much as 20 different factors contributing to it. While these seasonal surveys provide guidance many times, they neglect to implement specific actions that companies can take to develop on their engagement scores.
The dynamic nature of work and engagement thus urged companies to look at an alternative approach which “listened” to employee feedback on an additional regular basis and provided actionable insights to management.
The other driver for this transformation happened as businesses started to achieve continuous performance management; they often cleared that feedback and engagement reviews should be related to the method.
This continuous feedback process at the organizational level is termed as Pulse surveys. They are slated to follow the annual employee engagement surveys just like continuous feedback is to follow annual performance appraisal systems. These quick surveys typically worked to employees on a regular, weekly, or regular basis are auto-generated and can be based on major events in the company or in work remaining done by the employee.
The objective of the pulse surveys is basic – provide managers and leaders with a snapshot of what’s Operating and what’s not going more often for them to take action, thus increasing employee engagement at work. These surveys can help recognise management issues, skill gaps, safety and compliance issues, and fraud and theft problems never before made visible.
Individual Performance Management
As explained at the beginning of this article, we see that constant performance management as a component of the performance review method is a growing trend. As per the Deloitte’s 2017 Global Human Capital trends research, 70 per cent of organisations are in the means of reinventing the performance management method in their companies.
The impact of these developments is being measured, and 90 per cent of businesses that redesigned performance management discussed direct improvement in engagement, 96 per cent said the process is now easier and 83 per cent said the quality of conversation between employee and manager changed.
The performance management process is being examined, and its scope is getting extended to focus more on development than just evaluation. This suggests that goals and objectives or OKRs will be part of the performance management systems it will also hold frequent conversations centred on recognising areas of strength and special skills needed to complete the tasks properly.
The conversations will also stress on coaching and development while giving avenues even to discuss career paths in the company, thus understanding employee aspirations and allowing them to achieve the same.
Some Of The Key Characteristics of a Continuous Feedback Process That Drives Performance and Compact Are:
Agile feedback loops – Weekly major check-ins complement the organisation’s performance standard of recognizing, understanding and feeding performance for the future.
Short term focus – Mainly according to Josh Bersin, organisations that set quarterly performance goals produce 31% higher returns from their production process than annual ones. And monthly performance goals give more reliable results.
People Development and mainly Coaching Approach – as digital natives join the workforce, combining performance management to development requirements will improve the employer value proposition.
Qualitative KPIs – transforming the nature of work and demand for regular feedback constrains the development of qualitative performance measures.
Integration with various business goals – rethink how to link bonuses, rewards and recognition program to qualitative feedback collected during check-ins.
The Lure of Analytics and AI
The continuous feedback systems will surely generate a lot more data via its various interactions between employee and manager, and businesses are hoping to leverage this information to make educated decisions. As businesses operate a network of teams and are shifting from jobs to work in their operations, they need to align goals, provide feedback and coach for review in real-time, continuous and multi-directional.
With the growth of people analytics and metric-driven choice-making in the organizations, the continuous feedback systems are growing an essential source of qualitative data that can be coupled with quantitative data to make more knowledgeable decisions, give employees with precise feedback and development inputs, and also track the impact of various actions on specific metrics and variables.
Analytics and AI can work collectively to build imminent models while also contributing contextual insights for using certain specific actions. These tools can improve managers analyse specific interventions and thus recognise the ones that are likely to make an impact based on imminent models and important data.
The Challenges
However, implementing a constant performance management system, particularly in a global environment is a difficult task as cultural or regulatory features may restrict the variations in the performance management process. Adidas Group, for instance, discovered that its employees in Asia wanted an also traditional, structured program while US workers needed a more agile process. As per an analysis by NeuroLeadership Institute; 88 per cent of companies took two years to gain meaningful traction with a new performance management software.
Designing and creating a culture of continuous feedback is a course and has various facets that companies will have to consider. As we have seen organisations that have started on this journey have proceeded to make changes – for example – Deloitte, PWC and many more that worked going numberless are returning performance ratings but the usage of more than one number and having the new emphasis on development feedback.
As organisations start on this journey of building the practice of continuous feedback they would have to include multiple changes in technology tools while also spending in building employee and manager capacities of both receiving and giving feedback to several others.
As the continuous feedback method becomes a two-way street, companies will also build mechanisms to make people responsible for the feedback they give and receive. In this journey, businesses would have to continuously train people and develop methods to identify best practices while supporting employees and managers recognise and cope with both positive and negative feedback.
In conclusion, we are all aware of this quote from Jim Collins book – Good To Great – “A day to day experience of feedback and robust professional review is one hallmark of successful organisations.”