When Netflix said it's ditching formal reviews and switching to informal, more frequent feedback, people scoffed at another "Bright, Shiny Object." Today, 70% of multinational companies are doing the same.
Companies used to have a ritual: Annual, biannual, and quarterly reviews. In these reviews, HR people took care of rewards and compensation, employee feedback, and succession planning. But in today's world of instant gratification, this ritual has now outlived its usefulness.
Companies are getting flatter and more digital, which requires more communication among team members. Employees expect frequent feedback to bolster their performance, learn and develop, and feel a valued part of your organization. Managers are listening. More than 36% of HR managers say that their company is increasing feedback frequency.
Empirical evidence is clear: continuous feedback is better. It focuses on the future instead of the past, removes judgment from the feedback, and fosters two-way conversations that make the employee feel listened to. Here are some more reasons why switching to continuous feedback makes sense.
Companies need to be agile
"The world isn't really on an annual cycle anymore for anything," said Susan Peters, former SVP HR at GE, in a Quartz article on GE getting rid of its annual performance reviews.
Today's businesses are more complex, globalized, and operate in highly competitive environments. They need to be agile to avoid getting disrupted. This new reality has them switching from elaborate, multi-year plans to shorter-term, project-based work. Annual or biannual feedback systems of the past century don't work in these fast-paced work environments.
More than one-third of US companies are in the process of replacing those world war era systems with more frequent and check-ins-based feedback. Companies in technology, finance, and media are leading the way—but the shift is happening across industries. GAP, Pfizer, Cigna, P&G, Deloitte, GE, IBM, Bridgewater, and Netflix use continuous feedback with or without ratings-based formal reviews.
Employees are more than workers
Today's employees are more purpose-driven than factory workers a century ago when supervisors used performance reviews to maximize tasks done. The COVID-19 pandemic has only served to boost that need for a sense of purpose. In a McKinsey survey, two-thirds of US-based employees said that the pandemic has caused them to reflect on their purpose in life.
Traditional feedback reduces employees to numbers—three, five, and seven-point ratings. Check-ins bring back the human elements: Recognition, coaching, and emotional support.
It gives your team members a sense of purpose, drives engagement, and motivates them to deliver high performance.
Feedback, feedforward, frequency
Traditional feedback is backward-looking and more focused on processes, documentation, and compliance. Continuous feedback is more like feedforward, forward-looking, and with a focus on coaching for constant development. The former dwells on past performance, and the latter focuses on how the employee can prepare for the company's future needs. A CEB research found that the companies that make feedback forward-looking improved employee performance by 13%.
Even more than its forward-looking aspect, it's frequency that gives continuous feedback its performance-boosting power. A Harvard study found "progress" to be the top motivator of performance. When employees feel they are making progress and getting ongoing support, their drive to succeed is at its peak.
Real-time coaching for course correction
Feedback is about coaching your employee—both the performer and the person. It's about letting them know that they can try new things and make mistakes. Managers can shape employees' path towards high performance, better engagement, and a more meaningful work experience with real-time feedback.
It allows managers and coworkers to course-correct employees as soon as they start drifting away. Managers can clarify objectives, review expectations, and support their people when and where they need it.
Trust and stronger employee relationships
Trust between managers and employees is the foundation of high-performing teams. One of the reasons employees dread review meetings is the fear of evaluations hanging over their heads. Check-ins separate development from evaluation. When the employees know that the managers are there to foster their development and not judge, it creates trust.
Team members know what their coworkers are working on better than managers. Real-time feedback promotes meaningful conversations among them. The result is shared accountability, work collaboration, and peer-to-peer learning opportunities.
Better data for performance reviews
Switching to check-ins doesn't mean you won't be looking in the rear mirror to assess an employee's overall progress. You may still have performance reviews for pay, compensation, succession planning—or target-based teams such as sales. Check-ins and the rich data they generate will only improve the process.
When the managers have a larger pool of data to dip into, they have a broader picture of employee's performance with context. It removes the biases, distortion, and personal agendas from the reviews—making it fair to employees. Zalando, a European e-commerce company, collects feedback data from meetings, brainstorming sessions, and completed projects—which they use to make more informed decisions in annual reviews.
Modern times require companies to shed outdated, ratings-based feedback models that thwart employee engagement, innovation, and productivity. The feedback that's frequent—daily, weekly, monthly, or post-project—forward-looking, and development-focused gives your people a sense of purpose and helps them achieve their peak performance.
Mesh helps companies empower their teams and boost performance with real-time interactions. Interested in knowing how Mesh can help you have real-time feedback? Speak to us today.