There’s no denying that ongoing performance management is taking the business world by storm. More and more companies today are dropping annual reviews that were popular in the 1980s and 1990s, instead switching to methods that encourage frequent discussions about an employee’s accomplishments and future goals.
Ongoing performance management was made mainstream by companies like Google and Adobe. It makes sense that executives would follow in their footsteps – these are incredibly successful businesses with happy, intelligent employees. After seeing results from these and other businesses, more organizations followed suit. In fact, according to the Harvard Business Review, the majority of companies worldwide are taking steps to include regular conversations between employees and managers as part of their standard performance practices. Not all of them have completely transitioned to ongoing performance management just yet, but the potential is there.
The Wharton School of the University of Pennsylvania looked into this trend and realized some companies were better at switching to ongoing performance management than others. Businesses that eliminated annual reviews outright saw a drop in engagement, partially because managers spent less time during each employee check-in than expected. Plus, getting rid of a scoring system left many managers without a point of reference. When left to their own devices, they weren’t great at objectively evaluating employee performance and offering helpful feedback.
Meanwhile, companies that were successful had a strategy in place. They prepared for the change by training management and clearly communicating their objectives for the switch. Managers at places like General Electric and Cisco were told what executives hoped to gain from these new measures from the start, not after the transition. They also received the tools to help employees set and achieve individual goals.
In addition, these businesses often used computer or mobile apps to measure employee progress.
“First of all, it’s a fast and efficient way of communicating between managers and employees, where a manager can enter a couple of points on the app, and if there are touch points it’s all getting documented there,” Anna Tavis, a leadership professor at New York University, told Wharton.
These apps allow both managers and employees to view, comment on and encourage each other in reaching their goals. With all of these tools as their disposal, ongoing performance management becomes less of a burden than annual reviews and more supportive of both employees and businesses.