It’s been a common refrain in the HR space for the past few years that the traditional approach to performance management is broken. Conducting reviews once a year doesn’t accurately reflect the way most people work, it takes too much time and provides very little in return, and it’s generally loathed by most people who participate in it.
In response to these strong negative feelings about performance reviews, some companies have adopted the traditional 360-degree review instead. This approach is based on the belief that collecting feedback from managers, peers, and direct reports will provide a more holistic view of an employee’s performance and therefore more accurate information for conducting performance reviews and promotion or compensation decisions. Unfortunately, there are a number of flaws to the traditional 360 review approach. Let’s look at them in more detail.
Where the traditional 360 falls short
Performance management consultant Marcus Buckingham writes, “I still think all but a very few traditional 360 degree surveys are, at best, a waste of everyone’s time, and at worst actively damaging to both the individual and the organization. We could stop using all of them, right now, and our organizations would be the stronger for it.” According to Buckingham, the problem with the traditional 360 review is that it produces bad data. Traditional 360 reviews are particularly susceptible to idiosyncratic rater effect, where the rater’s own perception of the skills in question accounts for the majority of their answers. Getting feedback from multiple people doesn’t change this—it just provides you with more bad data.
Other critics point out how much of a strain traditional 360 reviews can be on company resources—Meg Halverson estimates they take about 3 weeks to conduct. And, worse than that, because traditional 360 reviews are often conducted anonymously, they lack context and make employees feel uneasy, which can hurt productivity. Halverson writes, “The subjects of the reviews are often left wondering who said what and in what context. This can be disabling to future performance and to office productivity.”
Liz Ryan puts her disdain for the traditional 360 succinctly: “360-degree feedback systems shred the fabric of trust in an organization.” Here at Zugata and with our customers, we’ve observed several benefits to giving attributed feedback rather than anonymizing it, including higher engagement and participation.
Taking an employee-first approach to reviews
We’ve covered a number of reasons why traditional 360 reviews don’t work. What should companies do instead? Here at Zugata, we believe the first principle for designing the next generation performance management system is to think about it from the employee’s perspective—what they need—and build processes and tools that support them.
Cutting-edge People teams begin with the assumption that employees want to be successful at work and in order to do that, they want to know how they are doing and how they can improve to achieve their career aspirations.
As companies think about enabling their employees to reach their best performance, focusing on employee development is an absolute must. Development is not a once, twice, or even four times a year event. Development is continuous—employees want to continuously learn and develop and companies must prioritize that.
People teams must offer a lightweight and frequent way in which managers can assess their talent, which can then be used as input for compensation decisions.
At Zugata, we believe that combining these two approaches: a deeper focus on employee development and more frequent, lightweight assessments of performance, amounts to a more holistic performance management system—one that helps employees, and therefore their companies, succeed.
What this looks like in practice
We recommend requesting and collecting two types of feedback on a regular basis—manager-requested and continuous. Let’s explore each type in a little more detail.
The purpose of manager-requested feedback is to give managers a more holistic view of how their direct reports are performing to help inform compensation and promotion decisions. Managers are able to see who their direct reports have been working with most closely and ask for feedback from those individuals. Zugata provides templates for manager-requested feedback, but these questions can be customized so that they’re relevant to specific projects and roles.
Unlike the traditional traditional 360, which only comes once or twice a year in tandem with the performance review cycle, manager-requested feedback is a resource that’s available all the time. We recommend creating a more thoughtful cadence, such as requesting feedback when a large project wraps up or around the time when employees are completing their own quarterly self-reflections. Not only does this create a historical catalogue of feedback and reduce the effects of recency bias, but it can also help eliminate reviewer fatigue since not everyone will be requesting feedback at the same time.
While manager-requested feedback is a tool that helps managers better understand their direct reports’ performance, continuous feedback allows employees to get feedback on their own performance on an ongoing basis.
Here’s how it works: Zugata regularly prompts the people who work most closely with someone to provide simple, actionable feedback. Templates help ensure that feedback is focused on an employee’s work and on outcomes they have the ability to change. The purpose of continuous feedback is to help employees with professional development and growth, so it’s only shared between the reviewer and the recipient. Managers don’t get access to the continuous feedback their direct reports have received.
By collecting continuous feedback year-round in a safe space, employees learn to think about their development on an ongoing basis, and this also removes the element of surprise from manager evaluations. Anything a manager learns from collecting manager-requested feedback and shares with their direct report will have already come up through the employee’s process of collecting continuous feedback.
Tying it all together
There are a number of reasons why traditional 360 reviews are not the ideal approach to performance management. We believe the combination of manager-requested and continuous feedback puts employees’ needs first. When you take this approach, you build a work environment of trust, where employees are empowered to do their best work and are excited to grow and develop.
Want to learn more about putting some of these ideas into practice at your organization? Get in touch!