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As companies replace corporate hierarchies with flatter reporting structures, they're also decentralizing power in the performance review process by gathering feedback from colleagues and not just top executives. Crowdsourcing feedback and providing it on a continual basis, rather than in one lump package at the end of the year, allows employees to improve their work and receive recognition throughout the year.

Better yet, employees favor reviews with feedback from their peers. Four in five employees think an accurate review requires a combination of input from managers as well as colleagues, according to the Globoforce Workforce Mood Tracker study. “The arrival of the crowdsourced performance review is a welcome paradigm shift in the human resources industry,” says Eric Mosley, CEO of Globoforce. “An innovative, more complete system for providing team members with accurate, consistent feedback creates happier employees and more productive work environments.”

Why Peer Feedback Is Successful

Whether peer feedback stands on its own or as part of a 360-degree review, including employees in the recognition and feedback process creates a positive workplace environment. When all employees are asked to contribute praise and constructive criticism about their colleagues, it builds a culture of open feedback and supports collaboration, notes Karen Caruso. Crowdsourced evaluations also create a community of accountability where employees can make sure that employees are working on areas they need to improve, adds Caruso. 

"The first time I ever had a peer review I got the most valuable feedback I've ever received in an evaluation process," says Tim Sackett, president of staffing firm HRU Technical Resources and blogger at The Tim Sackett Project. "It was a punch to the stomach, but it made me focus and change more than anything I ever had in a corporate setting."

A manager often doesn't see how an employee works on all of his projects and how he interacts with different teams, so having employees fill in the gaps, especially around an employee's collaborative and interpersonal skills, gives a complete picture of employee performance. Ninety percent of HR professionals say peer feedback is more accurate than manager feedback, according to the Employee Recognition Survey by Globoforce and SHRM.

While the annual performance review still exists, companies are gradually incorporating colleague feedback into employee evaluations. According to the Employee Recognition Survey by Globoforce and SHRM, 85 percent of companies are currently using or would consider using peer social recognition, and 78 percent say crowdsourced recognition would be helpful to integrate into formal performance reviews.

Advice from Experts: 6 Tips for Crowdsourcing Reviews

Integrating employee feedback into performance reviews isn’t as easy as sending out an email saying, “We want to hear from you.” It requires a detailed strategy with the ability to respond effectively to employee feedback on the process itself. Here are some tips from experts about how to do it right.

  1. Outline the process. Joe Shaheen, managing principal of Human Alliance, a Washington, DC human resources consulting firm, suggests addressing these questions: "Who will be reviewing who?" and, "What type of feedback will employees be asked to give?" Clarity from the outset should be the priority.
  2. Identify characteristics of top performers. Is it more important for employees to hone their technical skills, be quick learners, excel under pressure or have collaborative spirit? Based on the priorities, encourage employees to frame feedback around what’s important, suggests Shaheen.
  3. Give continuous feedback. End-of-the-year reviews are helpful to show the progress of an employee and to provide a holistic picture, but it’s best to reward successes and address areas of improvement when it’s timely and relevant. Continuous feedback can come in many different forms, whether informal recognition/badging or as part of a more formal performance management process.
  4. Provide flexibility. Having structure and defining the purpose of peer-to-peer feedback is a must, but it won’t be successful without giving employees some freedom to provide feedback in a way that suits them, adds Shaheen.
  5. Make it a routine. Panay suggests building peer feedback into team meetings. For example, at the beginning of meetings LinkedIn CEO Jeff Weiner asks employees to share one personal victory and one professional achievement from the previous week. Starting meetings on a positive note and talking about the little things highlights the power of small wins, notes Panay.
  6. Keep managerial reviews. Crowdsourcing feedback is great for the many reasons already discussed, but it shouldn’t be the only source of performance evaluation. Think of peer-to-peer reviews as a supplement rather than a replacement, Mosley tells Inc.

Employees want to provide feedback to their colleagues and their colleagues want to hear it. When the workplace revolves around the employee experience, integrating crowdsourced feedback into performance reviews can produce meaningful ways to motivate and engage employees in the long term.