When told that a major newspaper had published his obituary, Mark Twain quipped, “The reports of my death are greatly exaggerated.” The same could be said for the employee annual performance review, what with all of the hype that’s been published in recent years about corporation after corporation scrapping their annual reviews in lieu of software applications designed to review employees more frequently and in real time. On one hand, annual reviews are typically based on events that happened in the past, over the entire previous year. A year, especially now that that average job tenure is a little over four years, seems like a long time between reviews. Plus, with human memory being what it is, issues that came up months ago may not even be included in the review. But on the other hand, if employees feel like their performance is constantly being monitored by Big Brother, it might knock the wind out of the old office morale sails. So, what’s the best way for the performance review to evolve?
To get a better understanding of where the performance review process is headed and how employees can better embrace the changes, I spoke with Leighanne Levensaler, senior vice president of products at Workday. Workday offers enterprise-level software solutions for human resource and financial management. “Many customers are finding more value for the business by moving away from a traditional annual process,” said Levensaler. “The pace of business and the new majority of the workforce dictate that we can no longer wait a year to understand how workers are performing. Employees require much more frequent feedback so they can improve their performance on their current projects. This enables better performance which ultimately produces happier workers, reduces turnover and provides a positive impact to the bottom line.” When I asked her if there was a “Big Brother” aspect to these more frequent, or even real-time reviews, Levensaler said that ultimately it helps employees fine tune their on-going efforts to be more in line with their organization and their own career path. “The practice of frequent check-ins is just good and active management,” Levensaler said. “People want to know where they stand, how they can grow their capabilities and connections, and to pursue their career interests in alignment with the needs of the organization.”
The DNA of today’s performance software
There are many software platforms available to track employee performance and they use various data points when evaluating employees. At Workday, their HR application, Human Capital Management (HCM), allows users to enable performance, not “manage” it. “Our technology helps organizations evolve from traditional performance management practices which automate and integrate processes focused on top performers, and move towards an inclusive practice that enables growth for all workers,” said Levensaler. Their employee engagement strategy, called Performance Enablement, is really the essence of taking the performance review out of the past and into the future. “Performance Enablement is grounded in the present and puts the employee at the center of a performance process that focuses on career development. Supported by Workday HCM features and functionality such as peer feedback, pulse surveys, career capture, career exploration, continuous check-in/conversation dashboards, and Workday Learning, Workday helps customers focus on improving the performance of their employees and foster a continual dialogue,” Levensaler said. “For example, while creating an employee development plan, a manager would have insights indicating whether that employee has had a high occurrence of absence. Or, when opening a job requisition, an HR professional would have insight into the internal talent pool of employees who have noted an interest in that particular role, along with their compensation history, talent profile, and more. Reports, dashboards, and scorecards are all available to customers via a browser or mobile app, so they have instant information, notifications, and context to respond quickly and easily.”
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Man and machine
While “reports” and even “dashboards” are terms we’ve all heard for years in regard to reviews and computer applications, when Levensaler mentioned Workday’s application use of “scorecards”, it piqued my interest. What is a scorecard in this context? Is my boss scoring me against some other writer at some other newspaper based upon my output or how many mesmerizing facts and funny one-liners I injected in a story to make it more interesting? “While dashboards are often comprised of reports that display what you are working on, Scorecards provide transparency into how you are performing on your initiatives. Scorecards allow organizations to establish targets for their key drivers, measure actuals against targets, expose trending, add contextual comments for additional clarity, and drill down into supporting information. For example, a manager on her mobile device can look at a scorecard and find a bright yellow card – flagging a specific metric. The metric is “hiring against plan” and indicates that we are below plan, trending neutral. Tapping on the card, a comment pops up and displays a comment revealing a hurricane delayed construction of a new property, putting recruiting efforts on hold for a minimum of two months. With another tap, the manager is looking at the headcount plan report and can decide if adjustments are required,” said Levensaler.
So should we be writing the annual performance review’s obituary? Like anything that evolves, it will take time for many organizations to embrace the change. If your organization is considering the shift from the annual performance review to a more frequent review process, perhaps the biggest consideration should be to ascertain how it will affect the overall culture of the organization. “We believe that culture is something that is very personal to an organization,” Levensaler said. “Regarding performance specifically, a company’s approach should reflect the organization’s culture.”