Transform the Review Process

 -  5/22/12

  Return to: http://talentmgt.com/articles/view/transform-the-review-process/

During the past decade, the employee performance review has been in a state of transformation, and most agree it requires an ongoing effort beyond the annual review.

The value of year-round performance management continues to evolve to address areas such as goal alignment, skills inventories, succession planning and career development. Yet the annual review process has been left unchanged. Managers rely on memory to evaluate employee performance during the year. In some cases, additional performance feedback is included in the discussion, but only from manager-solicited sources. This can lead to a limited view of employee contribution or even manager bias.

To improve the review process, some have implemented technology to allow managers to gather feedback from a variety of sources inside and outside the company. These systems are designed to catalog real-time conversations and exchanges among managers, staff, co-workers and customers to support the annual review. While these systems offer an improvement in the breadth of feedback included in the evaluation, they are still limited.

Some companies have begun to use social collaboration to capture regularly occurring performance conversations happening across the organization. Thirty-six percent of respondents to human resources consultant Knowledge Infusion’s fifth annual Talent Management Survey indicated they are likely to increase their use of collaborative HR technology to support collecting feedback throughout the performance management process (Editor’s note: The authors work for Knowledge Infusion).

These tools include status updates, location-based check-in, voting and ranking — all designed to capture and communicate real-time activities, interactions and peer opinions. Many performance management vendors have begun to embed these types of collaborative tools in their products.

Let’s Talk About It
A growing belief that annual reviews do not adequately capture a year’s worth of employee contributions — nor do they help employees to better understand how those contributions impact the success of the business — is driving a performance management evolution.

Despite the fact that workers are more connected, many struggle to name top business priorities or what they should focus on to make an impact. Failure to make this linkage can lead to disengagement and negatively affect the organization’s ability to meet its business goals.

One way to increase the value of the evaluation process is to approach reviews not as a one-time event, but as an ongoing conversation, recognizing that employees want regular feedback to help them understand their contributions to organizational success.

When employees understand how their efforts contribute to the big picture, they are more engaged, more efficient, share information more freely and try harder to meet customer needs.

Further, when there is transparency around both day-to-day and strategic company plans and decisions, workers connect more deeply with the organization and feel more valued.

Enabling the Transformation
Some organizations are moving away from the “what is good for the company” thinking that often overlooks the needs of the multigenerational workforce.

An example is media company E.W. Scripps. Scripps has interests in newspaper publishing, broadcast television and syndication. Historically, it has operated as a holding company for a number of local print and broadcast media companies. However, after a shift in corporate strategy to better integrate and innovate its business, Scripps standardized dozens of its talent management processes.

“When it came to performance management, each local company was doing their own thing, making it very difficult for us to consistently evaluate our talent,” said Robyn Hildal, vice president of talent and diversity at Scripps.

Senior leadership at the company believes talent is its most important asset, so much so that it calls talent management “career management” to emphasize the employee, not company, focus. Hildal said Scripps is working hard to allow employees to be responsible for their own performance and empowering managers and HR to support them. “When employees realize the idea that performance management isn’t something that’s being done to them, they really begin to engage and see the value.”

Hildal said achieving her vision can’t happen without collaboration as the centerpiece. “We are now moving into the social media space, and once we fully understand how to play, we’ll work just as quickly to build that into our process.”?

Is There Risk?
One common concern when addressing any social platform in the corporate environment is the risk of employee negativity hurting corporate culture.

Many of the same concerns were raised about company intranets a decade ago. Then, HR departments feared the liability of allowing employees to post non-policy-conforming peer or manager feedback, or potentially altering goals or performance data if things weren’t locked down. Today, many fear employees may post comments that might be damaging, threatening or open the company to litigation if adequate documentation is not maintained.

“We’ve lived through the frustration of rigid constraints in our goal-management processes — managers entering goals and locking them in, so employees couldn’t change them. It didn’t work,” said Kelly Butler, director of global HR operations for Rackspace Hosting, a hosting services firm.

Using a homegrown system, Rackspace set out to have its more than 4,000 employees meet with their managers four times per year to discuss their goals. Butler said it started out fine, but eventually goals got out of sync.

“By the time the employee and manager sat down to evaluate goals, they were often no longer applicable because our business objectives had changed,” she said. “We needed a better way.”

Rackspace implemented technology to allow managers and employees to collaborate on goals in real time, supporting Butler’s vision of “evergreen goals,” goals that are flexible, visible and reflect more accurately how business at Rackspace is done.

“With our new solution, we don’t really care where or how the dialogue happens, we just believe there shouldn’t be any surprises come evaluation time,” she said.

As a result, managers have become more involved and less likely to hold things back. “Managers used to have to take action to make team goals visible. Now everything is always visible. This has given us new levels of transparency as things aren’t just in the managers’ hands — now employees are in partnership,” she said.

When embraced, enterprise collaboration tools enable communication and knowledge sharing up, down and across organizations. As organizations expand their use of this technology to enhance their review processes, governance models will need to evolve to manage communication and account for the collection and analysis of new types of workforce data.

Amparo Bared, vice president of human resources and talent management at Ryder System Inc., a transportation, logistics and supply chain company, said performance management can enhance collaboration and communication between employees and managers. “We feel performance management is a critical starting point for us — the foundational communication of where the company is going and what role employees play in supporting that direction.”

Ryder uses collaborative tools to connect employees to the business’ direction. “Here, things like innovation and operational excellence are not just buzzwords; they are the lifeblood of our brand and our competitive advantage,” Bared said.

Further, performance management is no longer a one-time, annual event, it’s an ongoing dialogue around past, present and future improvement consistent with the company’s service-oriented culture. “When we create an environment that fosters this collaboration, our employees help each other just like they help our customers,” Bared said.

Down the Road
The future of performance evaluations is regularly debated among talent management practitioners, with some suggesting reviews should be done away with altogether. While the fate of the annual review is unknown, what is clear is that today’s workers demand year-round, relevant, actionable feedback from their managers. Social collaboration can capture real-time events, conversations and interactions, and ease the manager’s burden around data collection and documentation.

By using the data already being captured in collaborative tools such as status updates, instant messaging, location-based check-ins and peer-ratings, managers have the building blocks they need to construct a comprehensive and accurate assessment of an employee’s contribution and performance over the course of a week, month or year. Talent managers don’t need a platform to encourage conversation, or a system to drive collaboration. Just encourage people to start talking.?

Mike Brennan is director of Knowledge Infusion’s OnDemand Practice. Kim Heger is the director of consulting services at Knowledge Infusion, with a focus on talent management. They can be reached at editor@talentmgt.com.