Why ongoing performance feedback enhances annual reviews
August 07, 2018
In today's fast-paced workforce, employees need regular, ongoing performance feedback in order to make adjustments in real time. Because of this, the annual review is often no longer enough.
According a survey from Accenture, one-third of companies are supplementing the traditional review process with frequent, informal check-ins. Ongoing feedback is meant to be a collaborative and innovative process, allowing managers to guide employee growth throughout the year.
But just because managers should provide ongoing feedback, that doesn't mean annual reviews need to go away—rather, the two should coexist. Annual reviews provide the transactional data needed in performance management (for instance, metrics for compensation, headcount and planning), while ongoing performance feedback provides real-time evaluation that is more readily relevant to employees. Moreover, it helps employees perform better, which yields higher engagement and increased quality of productivity.
The Evolution of Ongoing Performance Feedback
In periods when organizations had plenty of talent to draw from, annual reviews simply made sense—good workers would be rewarded, and those who were not performing up to standard were let go.
However, when there's a talent shortage, an annual review by itself doesn't work as well. It is more important for managers to find ways to develop the employees they have, growing talent from within. Today, talent management has become a key focus of many companies, and employees need to receive feedback more than once a year in order to continually learn, grow and develop their skills to meet future workforce needs.
Two Models of Thought
Both types of performance feedback come with their own advantages and drawbacks. With an annual review, it is easy for small problems to get swept under the rug and forgotten about; typically, conversations will center on the major highs and lows from the past year. Such high-level reviews also tend to be inefficient and time-consuming, making it hard to justify doing them more frequently. As it is, managers spend an average of 210 hours doing reviews each year, and, to top it off, 90 percent of HR managers believe these types of reviews don't result in accurate information.
Having ongoing performance feedback conversations throughout the year enables managers to check in on short-term goals that may only apply to a month-long project, help employees struggling with a specific situation and ensure their team is staying on track with larger learning and development goals. Ongoing feedback more closely follows the natural cycle of work, since it switches the focus of reviews from past performance to present performance. And, ultimately, it delivers higher rates of engagement, better productivity and enables talent development and retention.
Many HR processes, however, require annual performance review ratings. The ratings and numbers that often accompany annual reviews allow organizations to adhere to employment law, reward employees with merit-based pay and more easily utilize many types of HR software. The ongoing feedback model is typically based on verbal conversations that may not be tied to formal documentation.
Finding the Right Review Balance
Ongoing performance feedback is a valuable way for businesses to remain agile and prioritize employee development. Ongoing feedback provides a way for supervisors to give advice in real time and have holistic conversations with employees about their goals throughout the year. Organizations that employ this feedback model often benefit from a general culture of learning, which brings with it less turnover and greater productivity.
While annual reviews are often formulaic, that rigidity can be a net positive. There are also ways to create hybrids that combine positive aspects from both the annual review and ongoing performance feedback. Incorporating self-evaluation into an annual or biannual review, adding peer reviews into performance management or uncoupling promotions from the review process are a few of many alternatives to a purely manager-on-employee review.
The reflective focus and opportunity to have a deeper, more meaningful conversation during an annual review is the perfect complement to the collaborative nature and informal check-ins that accompany ongoing performance feedback. By finding a balance between these two styles of review, organizations as well as their employees can realize the benefits of both.
Looking for a better way capture data and feedback for your workforce? Cornerstone's flexible Performance Management Suite combines the philosophies of annual performance reviews with continuous feedback, allowing organizations to boost employee engagement, identify and develop talent and easily aggregate feedback data.