Performance reviews, long the backbone of performance management, are shifting. They're becoming more frequent and more flexible, and that shift is in no small part thanks to technology.
But this also means that employers have a lot of options from which to choose. The key, experts say, is careful evaluation and thoughtful implementation.
Keeping up with the shift
Performance reviews are becoming more frequent, more informal and more forward-looking, in response to both employer and employee demands.
Immediate and frequent feedback often tops the list of things workers want. Many employers today are responding by providing feedback informally on an ongoing basis, and, for formal discussions, on a more frequent basis. That's where tech comes in.
"Traditional annual performance reviews can be uncomfortable, especially when the employee-manager relationship doesn't include regular feedback and/or overall communication is weak," Cord Himelstein, vice president of marketing for HALO recognition, told HR Dive via email. "Today, many technology systems are designed to offer more frequent feedback."
Mischa Riedo, co-founder of QuercusApp, agreed. "Exchanging feedback throughout the organization and in real-time is easier with technology," he said. "I can ask multiple colleagues for feedback on a specific project with a single click and have access to that feedback forever. That makes it much easier to receive feedback that is specific, timely, and actionable."
And such feedback can be a huge boost for engagement and development. For line managers, instead of sitting in front of a blank white page at year-end, they now have a ton of resources available to them to make a fair and transparent evaluation, provide meaningful feedback and keep the associated workload to a minimum, Riedo said in an email. And for HR, that can mean no more chasing missing reviews; tech can track the ones you've received, and remind managers and employees to complete the ones you haven't.
A documented, holistic, real-time look at performance can be invaluable, and tech can provide just that. "Technology is opening people's eyes up to the possibilities," Bryan Tsao, vice president of product for Namely, said via email. The business world has moved to the cloud, with documents that allow real-time commenting, editing and collaboration. "As a result, we're seeing an explosion of different approaches to goal setting and alignment, real-time feedback, gamification and predictive performance management as HR professionals explore tech's new potential," Tsao said.
So what does this technology look like? There are two types of tech solutions for performance management, according to Cliff Stevenson, lead analyst for Brandon Hall Group's performance management research: "ones that are a module or at least part of an overall suite of products for talent management, and others that are completely standalone products just for performance management."
"Basically, what any good performance management tech allows you to do is create your performance management process, then prompt for data collection, store and protect that data, and communicate that data visually," he told HR Dive via email. In the case of integrated suites of technology, that data can then be used for succession management or compensation decisions. But even with standalone products, it can be valuable to see how feedback is given and how often it's given, allowing HR to align its goals with overall business objectives, Stevenson said.
What's Working — and what's not
Experts say performance management technology is saving time and helping to create ongoing dialogues, all while improving employee engagement.
"In our experience, technology has become a great complement to make an ongoing dialogue between manager and employee as easy as possible," Riedo said. Parties exchange feedback in real-time and information is always accessible, making it easier to develop employees further, he said. It also means that feedback is no longer confined to the traditional top-down style because employees can receive feedback from the people they interact with the most.
And for HR, it's a huge time-saver; the department is better able to focus on more strategic work, rather than chasing after missing reviews. "As HR becomes more integral to a company's strategy, this is a game-changer," Riedo said, adding that line managers benefit as well, because "they can finally use reviews to actually build a bond with their employees and increase their engagement instead of struggling with an impossible task at year-end."
Namely has seen the same thing: "[W]e believe that a single system that is a source of truth for all employee data — including performance metrics — is an incredibly powerful way for HR to drive strategy," Tsao said.
Elsewhere, such systems have been a boon for other initiatives as well. Christian Health Care Center, for example, transitioned from an "antiquated paper-based performance review process to a digital-based tool over a decade ago," according to its SVP and CHRO Bob Zierold. "Our digital tool has provided us with the ability to become much more efficient as our staff has grown to over 900 with significant diversity in position levels and responsibilities," he said.
That's critical because performance measurement can be complex for the New Jersey-based senior living center. The organization is required to maintain detailed records about the completion of staff performance evaluations, Zierold said, and "going digital has allowed us to meet deadlines and quickly run reports on our performance review completion rates to demonstrate full compliance."
Still, there are things to watch for when adopting performance management technology. First, it needs to be easy to use, according to Tsao. "When HR rolls out clunky technologies to employees, particularly around a review cycle, it can turn what should be a positive experience for employees into a burden," he said. "That's why it's so critical that companies invest in HR tech that is engaging and easy to use."
It's also imperative to roll out a culture shift at the same time, said Riedo. Employers often mistakenly believe that a continuous process can be achieved without proper change management, he noted. "The various stakeholders — employees, managers, HR, etc. — must be informed of what the goals are, what their benefits are, what is expected of them and how the company is helping them to fulfill these expectations," Riedo said. "Only then can a feedback culture and its benefits truly be achieved."