Not surprisingly, performance reviews and evaluations are some of the least favorite activities among employers. Managers and subordinates both do not enjoy these tasks because it causes conflict and strife among team members. When one person earns a promotion over another at the end of the year, that can cause even more resentment among staff. Instead of tweaking a company's annual performance reviews to prevent upset, perhaps it's time to move to a completely new model for performance management.
Old-Style Performance Reviews
Traditionally, an annual performance review may be the only time an employee receives an honest evaluation of his performance. Some employers utilize a 90-day probationary periods, but then it takes another nine months for the annual performance review to come around. At which time, the employee may receive a letter outlining what he accomplished over the past year, and what he must improve upon. The review probably also contains a checklist with ratings between one and five.
The employee signs the document, and then it goes into a permanent file. That file then stays closed for another year. This old methodology should probably cease now the digital age of cloud computing is here.
Constant Feedback Models
One way to bring performance management into the 21st century is through constant feedback given to employees. Instead of an annual review, people can input feedback into a computer program all year long. Waiting one year for someone to improve could cost a business valuable revenue, sales and profits. A year-round performance-management model aligns a workforce more readily, so it meets goals faster.
Computer software makes constant feedback a reality. Software can help managers record feedback in dedicated files. An employee's log can show precisely when he received feedback, how the manager delivered the feedback and how the employee improved. Over time, this new system gives employees transparency, improvement and guidance regarding how daily activities achieve performance goals.
Constant feedback keeps employees and managers engaged in regular tasks. When someone receives encouragement, coaching and instruction on a regular basis, both the employee and supervisor collaborate to take responsibility for the employee's future. One way to do this is with self-appraisals for each worker. When employees give accurate evaluations of their own work, it ensures they develop and reach their own goals on their own terms.
Honest feedback keeps a performance-management system working properly, so supervisors and subordinates must use the software accurately to get the best results.
How does all this computerized information come together to show results? A computerized rating system, using a number scale, creates a graph showing where an employee stands with regard to performance and possible promotions.
Deloitte created a system whereby each worker appears as a dot on a graph. The dot summarizes a person's overall performance. When the program groups the dots together, it creates a model that picks out the employees best suited for a promotion. The dots, or snapshots, compile information from performance evaluations into quantifiable data that human resources can use.
Similarly, performance-management software should have some way to label an employee's performance. Information compiled over one year can give department heads an idea of who should earn a promotion, who needs more time in a current position and who deserves a pay raise. Once everyone knows how to use performance-management software, the investment starts to pay off with better decision-making skills.
Invest Now for Savings Later
One of the major concerns surrounding performance-management software is the up-front cost. Couple that with a company culture that may be resistant to change, and a business may find it hard to adopt new strategies for performance management.
A cross-industry analysis by SuccessFactors, conducted for PricewaterhouseCoopers, reports that its software could help decrease a company's turnover by 13 percent, increase its completion rates by 15 percent and improve its productivity by 3 percent. All these figures add up to lower expenses, greater revenue and increased profits.
Decisions with regards to revamping the performance-management system start with the upper echelons of a company. However, everyone needs to embrace the new program to make it function effectively.
Ways to Get Everyone on Board
Gamification and regular rewards are two ways to get workers on board for new performance-management software. Games and friendly competitions make hard work more fun for everyone. Gamification is like a fantasy sports league with weekly winners; this could turn into a year-long quest for a league championship. The best workers who plug into the games and do well win the best prizes, although anyone who does well should get something.
When workers do well, they should earn regular rewards. PricewaterhouseCoopers notes that 41 percent of millennials like to receive monthly rewards or recognition. These workers also enjoy constant engagement, regular feedback and employee development. The entire labor pool continues to shift toward younger workers who love technology and constant encouragement. Somehow, annual reviews are still the norm, and have been the norm, for 50 years despite dramatic shifts in how people work.
Businesses must adapt to keep pace with technology, consumer demands and different ways of making money. Performance management systems and software are one way to take employee evaluations to new heights. Despite the large investment early on, these software systems are well worth it to keep employees engaged, happy and moving forward on the path to prosperity.
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