The Performance Review is Fading: Is 360 Feedback Taking Its Place?

Why are you reading our blog? You’re here to know the best ways to increase employee engagement. You’re here to see the latest in performance management and optimization. You’re here to understand the secrets of HR experts.  Well, what do the experts do?

The experts are scrapping  the annual performance review

Look at this recent headline from NBC News: “Performance Review Company SAP Ditches Its Own Performance Reviews.” Multi-national German company SAP, architect of performance reviews for millions of employees worldwide (it counts 87 percent of the Forbes Global 2000 as clients), is abandoning its own annual performance reviews as “too expensive, time-consuming and often demotivating.”  

8-23-16-The-Annual-Performance-Review-Is-Over-Is-360-Feedback-Taking-Its-Place.pngYou know it’s bad when a company that butters its bread with performance reviews is getting rid of their own annual performance review.  SAP joins a long list of companies – both in the performance sector and beyond – who find annual performance reviews useless.  A 2015 survey by consulting firm Deloitte found that 58 percent of executives believe that current performance management approaches do nothing to drive either employee performance or engagement.

So what are all these companies using to replace the annual performance review? 360 degree feedback.

If you’re curious about what you’re missing out on, keep reading.

Collecting feedback from multiple sources paints a more detailed picture.

360 degree feedback is founded on the philosophy that the evaluation of any person’s performance deserves more than one knowledge source.  The opinions of the managers, peers, direct-reports, and even the employees themselves are all crucial to creating a complete picture of each performance scenario.  Aim for a resource that allows you to identify the feedback as “manager,” “peer” and “direct report” – that way, the employee can effectively address his/her trouble spots.

Constant, two-way conversations are less intimidating.

Because 360 feedback is a platform available year-round, rather than once annually, 360s allow for employee performance conversations, not interrogations.  When meeting only annually, employees go into reviews armed and ready to defend themselves against any accusations; after all, this may be their only chance to contribute to the “discussion.”  When conversations are two-sided and frequent, employees can be less defensive and more genuine.

360 feedback enables managers to deal with problems immediately, not retroactively.

What good does it do anyone to deal with an employee’s poor communication skills (or any problem) only once a year? 360s allow for quick correction, which gives the employee time to change the behavior.  360 feedback is also available all the way up the chain of command; if the CEO wants to know what’s happening on the front lines of her Boston office, she can.

Feedback is delivered to the employee, allowing for self-development.

Old 360 feedback systems used a manager to filter feedback; now, firsthand employee interaction is the norm.  When feedback is delivered directly to the employee, he or she has the opportunity to make changes before a manager has to step in. Additionally, this method allows the employee to respond to and ask clarifying questions about feedback.

Turn managers into coaches while giving room for growth.

Managers shouldn’t be gatekeepers, and employees don’t need to be controlled. More than anything, managers are coaches who should be developing their athletes.  360s allow for the constant coaching your employees need.  Furthermore, 360 degree feedback is available at any time – employees can solicit it, peers can send it, and managers can collect it.

You’ve seen what the best in the business are doing about annual performance reviews – why are you hanging on to the same system?  Learn more about what 360 degree feedback can do for you.

Learn More About Quantum Workplace's 360 Feedback Tool