Let's face it, annual performance reviews are unrealistic and aren't effective when it comes to adapting on the fly and making changes with maximal flexibility. Not only is the end-of-the-year scramble hectic and stressful, but who can really remember every single thing that affected performance throughout the whole year, unless they're one of the best record keepers the world has ever seen. As it seems, annual performance reviews may quickly fade into obscurity and become a thing of the past, as many companies are swapping from annual to a more frequent performance review format.
The more frequent the performance review, the more "real-time" it is, and the more readily able a company is to adapt, in essence correcting and/or reversing a lagging aspect of performance that would have gone unnoticed in an annual review. We live in a rapidly changing, almost instantaneous world, and for businesses to not only stay afloat but thrive, they need to be able to review and redirect their course in a rapid and almost instantaneous manner.
For real-time performance reviews to be implemented effectively, they need to almost be personalized and chock full of crowd-sourced feedback. As conducive to progress as real-time performance is, mainly smaller companies are making the shifts, while large corporations face a plethora of problems associated with changing their entire performance review system. Small businesses should take advantage of this changing of an era and begin implementing a variety of tactics to ensure the most detailed and thorough real-time reports are available.
One very basic tactic is creating criteria with which "team leaders" will effectively review their team members. Then encourage weekly meetings with team leaders, breaking down annual performance reviews into weekly chunks. Another tactic that has been implemented with great efficacy is the mobile app, Snapshot. With this app, employees can ask to be reviewed at any given moment based on five principles; leadership skills, relationships, business acumen, technical capability, global acumen. Instead of being given a standard rating, they are simply informed on if they are surpassing, failing, or meeting expectations.
Real-time performance reviews are still time-consuming, but not nearly as much as annual reviews have been. Instead of writing lengthy end-of-the-year evaluations, leaders are conducting 5 to 10-minute review meetings, which shortens annual reviews exponentially. While they both have their efficacy, real-time performance is more effective at allowing on-the-fly adaptation, whereas annual reviews allow one to see the bigger picture or the overall scheme of things. With that being said, they both have their uses, and when implemented in cohesion, can greatly increase a company's ability to assess and manage resources and performance.
Another time-saving option is the use of crowd source reviews, which is where employees company-wide can write reviews and ratings on other employees, though the feedback is, at times, indirect and not as conducive to individual employee improvement.
One issue that has arisen, however, is deciding on bonuses and pay raises without the traditional annual review and rating system. With that being said, a rating isn't necessarily the best way to decide on pay raises. If trust can be placed in team leaders, and employees can be accurately reviewed on their market values, company contributions, and how refined their skill sets are, then this extensive input should be enough for a company to make decisions on raises and bonuses.
All-in-all, though it is a work in progress, real-time performance reviews are in the immediate future, and change isn't painful, only resistance to change is.
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