Needs Improvement: The Death of Traditional Performance Reviews
The end of the year is almost upon us, a time to look back over the triumphs and disappointments of the previous 12 months. It’s also the traditional time that many companies carry out their performance reviews. However, research has shown that end-of-year performance appraisals not only don’t motivate us, there is a widespread tendency for manager bias. They aren’t worth the time, according to many companies. So, what’s the alternative?
We interviewed Matt Beckstead, product manager with 7Geese, the innovative software company that is part of the movement to transform the way reviews and performance management are conducted, to find out.
Goldbeck Recruiting: Firstly, can you clarify some of the problems with traditional performance reviews?
Matt Beckstead: “The problem isn’t with performance reviews per se, it’s that they’re often poorly done, so a huge stigma has built up around them. The theory of the traditional approach is that employees get cumulative feedback once a year but, in reality, it tends to be heavily biased towards recent performance (the recency bias), halo effects (when someone does one thing well, and it colours their overall performance) or the horns bias (the opposite of the halo). In addition, many companies focus solely on the compensation aspect of reviews, whereas those that do it well focus as much on the growth of the employee.”
Goldbeck Recruiting: What does the 7Geese application do and how does it help to address these problems?
Matt Beckstead: “Our application has two major components. The first is performance management, and the other helps businesses to set and align goals and ensure employees attain them. We utilize the OKRs (Objectives and Key Results) which is a process many technology companies use for setting, communicating and monitoring goals.
It has several advantages, and one of them is transparency. All employees can see one another’s goals. Results are visible across the company in a structured way; it helps HR and leadership teams to understand which departments or teams may need support and which ones are excelling.”
Goldbeck Recruiting: Can you explain the concept of continuous performance management and how this kind of process and software can help managers be better at feedback?
Matt Beckstead: “Continuous performance management is about having regular interactions with your manager or coach, whether quarterly, or monthly. It’s a research-based approach that focuses on what works, and the software facilitates the process. The application provides the 3 distinct types of feedback: coaching, evaluation and appreciation, that are advocated by Harvard lecturer Sheila Heen and Douglas Stone in the books Difficult Conversations and Thanks for the Feedback. Appreciation feedback is done through values-based recognition, which is a highly effective motivation driver. Individuals can also drive their own performance management, so they get the feedback they need when they need it. Through templates and reminders, we make all of this easier for both sides. Admin reporting is also more efficient – for example, we have one large client who has cut down on weeks of administrative time.”
Goldbeck Recruiting: Not every manager is a good coach. Is this technology helping managers to raise their game?
Matt Beckstead: “New employees often have a perception that their manager is going to be an amazing career coach when in reality many managers are in the position because they have too much to do and they simply need someone to delegate to. And, because managers often haven’t had any coaching training, they don’t know how to provide constructive feedback. Inexperienced managers often unintentionally attribute poor results to an individual’s abilities (‘you’re not organized’) instead of focusing on a desired result (‘Preparing would be helpful for…’) We enable managers to ask the right questions, give the right feedback as well as provide the tools to help their employees grow. People want to know where they stand so they know where they can improve. A structured system helps with this.”
Goldbeck Recruiting: As a Canadian recruitment agency, we’re familiar with HRIS systems, some of which have performance management adaptations. How do they compare with this type of performance management software?
Matt Beckstead: “There is a big difference. HRIS systems are typically designed to be used by a few HR-focused users and their strengths are data storage and their ability to integrate with other back-office systems. Performance management software is specifically designed to facilitate and capture social interactions between people; this requires a higher level of user experience.”
As more employees demand ongoing feedback and development, more companies will be adopting tools and approaches that challenge traditional management paradigms. It’s a revolution that is gaining momentum, driven by the data and results it is generating. If you’re considering a new strategy for your company’s performance reviews, take time to do some research, see what is working in your industry and then tailor it to your organizational needs.