How crowdsourcing is shaking up performance management

Crowdsourcing feedback offers a number of benefits over traditional performance management when it comes to reviewing employee performance

Crowdsourcing feedback offers a number of benefits over traditional performance management when it comes to reviewing employee performance, according to an expert in the area.

One of the main appeals of crowdsourcing is that managers are not always in the best position to judge individual employee’s performance and progress, said Stuart Hearn, CEO of online performance management software firm Clear Review.

“This is especially true in larger organisations, when managers rarely work with employees on a daily or weekly basis,” he said.

“Despite this, they are forced to use their own observations to make important judgements.”

Many organisations argue that the best way to resolve this issue is to use the “social recognition data” and the wisdom of crowds to form a more reflective performance picture, in an innovative bottom-up approach.

“This approach of reviewing employee performance is shaking up performance management for a number of reasons,” said Hearn

“When a substantial group of independently-minded employees are brought together, it is possible to get a wider, more accurate picture not only of the individual employees but of the organisation as a whole.

“Managers can use the data to see how one employee is influencing another, and how the company as a whole is truly performing.”

Importantly, Hearn said this approach varies from the classic 360-degree review approach as feedback is not forced or formal, but rather, it takes the form of more natural observations that are recorded and captured throughout the year.

“This occurs when they are inspired, rather than obliged, to comment,” he said.

“This creates an accurate picture that means employees enjoy a better understanding of what performance is desired and appreciated, and the information can also be leveraged for talent development and succession planning.”

“It is possible to get a wider, more accurate picture not only of the individual employees but of the organisation as a whole”

A recent Towers Watson research report found that many companies are making significant changes to fix the overall process of performance management, such as replacing annual performance review cycles with more frequent employee and manager interactions, applying a more future-oriented definition of performance and potential, and implementing new technology.

The report found that 37 per cent of companies said their performance management programs are effective, while 26 per cent said their managers and employees are satisfied with the process.

However, half the companies surveyed agree that employees and managers just don’t spend enough time on performance management.

“For many organisations, performance management as we know it today is not working,” said Laura Sejen, a managing director in the talent and rewards practice at Towers Watson, which conducted the research.

“These programs haven’t delivered on their promise to improve performance, and there are widespread signs of frustration among managers and employees.

“Employers recognise the importance of these programs and that significant changes, not tweaks, are needed.

“That said, most employers believe scrapping performance management programs, including the use of performance ratings, is not the solution.

“In part, this is a reflection of HR’s focus on measuring compliance rather than the quality of goals set.”

The survey of HR executives found that 8 per cent have eliminated performance ratings, although 29 per cent are either planning to or are considering eliminating them.

A further 50 per cent said they have either changed or eliminated the annual performance review cycle in favour of more frequent interactions between employees and managers, or are planning or considering this change.

Nearly three-quarters have implemented new performance management technology, plan to, or will consider doing so.

“The results proved helpful and led to IBM putting an end to self-assessments and relative performance rankings”

“If the old ways are failing us, then we have to turn to the new for our answers, and this is exactly what top companies are doing,” said Hearn.

“Organisations such as IBM appreciate that in this modern age, regular, valuable feedback is fundamental to every aspect of life.”

Accenture, for example, overhauled their performance management system last year to ensure more regular feedback.

IBM turned to their employees when they were deliberating about how to streamline their performance management process and make it more efficient.

Via their social media platform, Connections, IBM approached their 380,000 employees around the world for their opinions, said Hearn.

“The results proved helpful and led to IBM putting an end to self-assessments and relative performance rankings,” he said.

“The comments also demonstrated that employees were eager for more frequent feedback. As a result, they began to incorporate crowdsourcing feedback.”

The sentiment behind continuous performance management is that feedback and interaction needs to be available constantly, and this communication has to be up-to-date, Hearn explained.

“The only way to effectively enforce this is to incorporate the use of technology, specifically software and apps,” he said.

“Many top companies are making use of apps to modernise their approach, using platforms that are familiar and reflect their favourite social media sites.”

IBM has introduced Checkpont, which is an app-based performance review system where employees can set their short-term goals and managers can provide feedback at any point.

Deloitte incorporated the use of Snapshot when they uncovered, in 2012, that 2 million hours a year were spent completing forms in their company.

Employees are now encouraged to schedule weekly check-ins with team leaders and can, at any point, use the app to request that their managers or peers assess their performance based on five factors: business acumen, global acumen, technical capability, leadership skills and relationships.

“If we have anything to learn from these large conglomerates, it is that employees are people who require, and deserve, regular and effective feedback,” said Hearn.

“Technology serves to facilitate this process, improve communication and heighten engagement, which will benefit companies greatly in terms of reduced turnover and enthusiastic, satisfied workers.”

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