Performance management isn’t exactly a phrase that’s going to fill your employees with a flood of happy feelings. Nor is it likely to make anyone in human resources particularly excited. If anything, hearing the phrase “performance management” might even cause them to have a sudden burst of anxiety. But why is that? Why are so many employees stressed at the thought of receiving feedback? Is it because the annual performance review has become a dreaded and archaic process?

After all, the end of the year is approaching, and everyone knows that their annual performance review is coming up. At this point, it has become as regular as clockwork, so they should be ready to sit down and go through the process. Instead, when the day arrives, a resounding groan goes through the office. It seems as if nothing else could cause your employees so much discomfort.

But perhaps the problem isn’t that your employees are resistant to feedback. Could it be that your method of delivering their review is to blame? You would be surprised to find out that most employees actually want to know where they can improve. What they don’t want is to sit through a performance review once a year only to receive a laundry list of their flaws. It may be time that you update from the annual performance review to a more modern approach. Let’s take a look at some of the drawbacks of your current method and how you can improve it.

Annual Performance Review

The Importance of Performance Reviews

Let’s get this out of the way first and foremost; if performance management is currently a problem for your business, you can’t simply get rid of it altogether. You wouldn’t drive a car missing a speedometer or a gas gauge for the same reason that you cannot attempt to run a business without knowing how your workers are performing. You need that vital information to know when to adjust. As long as you’re wanting to stay relevant in the market, tracking your employees’ performance will remain a vital instrument in your company’s toolbox.

Keeping accurate data on how workers perform allows you to identify where they need more training. Then, remedying gaps in their knowledge will reduce inefficiencies and boost your business’s productivity. The last thing you want is a staff of under-trained, unenthusiastic, and unambitious employees. Assessing their performance lets them know that you, as the employer, care enough to make changes and improve their skills.

The Downsides of Annual Performance Reviews

You may then be asking “if employee performance reviews are so essential, where am I going wrong?” The problem isn’t with performance reviews in general but with your annual approach to it. Although setting a dedicated time each year to sit down and assess your employees’ strengths and weaknesses sounds like an effective technique, you are doing more harm than good. Let’s take a look at a few ways that you’re shooting yourself in the foot.

A False Sense of Security

If you’re only assessing how employees perform once a year, it’s easy for them to walk in, take their performance review, walk out, and, as long as it wasn’t too bad, forget all about it until next year when they have to go through it again. But keep in mind that not all workers are looking to coast through life. Most want to move up and reach their next promotion. But even for employees who are looking to improve themselves, the huge gap in time between when they receive feedback can make it hard for them to know if they’re developing.

As for the unenthusiastic employee, only receiving feedback once a year lulls them into a false sense of security that they can keep making it through by putting in the least amount of effort. Honestly, with an annual approach, you might not even recognize that an employee is skating by. As long as they boost their sales in the last quarter, it’ll appear as if they’ve seen a rise in productivity. In reality, they’re gaming the system.

Inaccuracy

From the employer’s perspective, setting aside one day a year to sit down and assess employees simplifies the process by getting it out the way all at once. Employees just come in, sit down, and complete their performance review. But for the employee, having a single meeting, one day out of the entire year, in which they have to prove their worth to the company is a nightmare. There is so much pressure on the employee to make a good impression, especially if their chance of getting a raise rests on the outcome of their performance review.

Overly anxious employees are unlikely to perform at their best and you’ll be left with a less than satisfied impression of them. Even if their productivity suggests that they’re a top employee, seeing them crippled by the pressure of an annual review could lead the reviewing panel to subconsciously rate them more negatively than they deserve. You may not even realize it but, by using an annual performance review process, you are causing your employees more stress than they need.

Ineffectiveness

The whole point of a performance review is to gauge how well an employee is working, pinpoint their weaknesses, and set them straight. Unfortunately, using an annual review process, you are unlikely to affect major change in their performance. Besides stressing and scaring your workers into higher productivity, a single meeting is unlikely to give them the information they need to improve in the long run.

To create long-lasting changes in your employees’ productivity, they need more regular feedback and a pathway to improve their skills. A jotted-out account of an employee’s weaknesses might show them where they can improve but it doesn’t tell them how. Rather than viewing it as a support, your employee is more likely to take it as a non-constructive criticism.

A Better Solution to Annual Performance Reviews

Now that we know where annual performance reviews are failing, we can begin to address how to solve the problem. In each instance, the main issue is that you are not conducting performance reviews frequently enough. Therefore, the simple answer is to provide employees with feedback continuously throughout the year.

We know that this sounds like a huge time commitment and one that might not even pay off but stay with us. As with most problems in this day and age, technology has all the answers. Thanks to automation, you no longer have to sit through hours of individual performance reviews. Instead, using performance management software, your human resources department can provide employees with automatic feedback at any time.

You’ll be able to track employee performance in real-time to identify where their strengths and weaknesses lie. Compared to an annual performance review, you’ll have a constant stream of data to identify where your employees need more training. Rather than simply identifying the problems in your company, you’ll have the ability to pave the way to better solutions.

Furthermore, with performance management software, employees will no longer be left wondering to what standard they should be working. Simply explain the expected standard clearly and transparently and leave employees to fulfill it. If they are not meeting your standards, just leave feedback, and let them work to fix their mistakes.

How It Works

Setting up new software may sound rather complicated, but the thing about performance management software is that it’s quite easy to setup. That’s because there isn’t really any setup! The best options for performance management software function through online platforms.

As employees complete and submit assignments, their performance is recorded in a workflow and that data is then saved directly to a secure digital cloud. Whenever management, human resources, or employees wish to access work, they can do so through the cloud. This means that your employees will have absolute mobility. As long as they have an Internet-capable device and a Wi-Fi connection, they’re good to go.

It is crucial, however, to assess the accessibility of a platform before you invest in it. Be sure that the human resources team and employees will be able to use the platform without receiving additional training. It should be a streamlined and straightforward platform. After all, the whole point of switching to an online platform is to make performance reviews easier.

Benefits for the Employee

Implementing performance management software does more than just simplify your end of employee reviews. It puts the power back into the hands of the employee. Whereas with an annual review, the employee is put under intense pressure to make a good impression, using this software manager/employee feedback becomes a collaborative dialogue rather than a one-sided assessment.

Employees will feel as if they have more control over their position in the company and can take an active role in improving their performance. This works via two-way feedback. If employees are aware of an area where they need more training, they can submit a request to learn what the need. Likewise, if compiled data shows that employees across the board are weak in a particular area, you can implement deeper training in that field.

Your employees will no longer feel ganged up on at the last minute when they find out they’ve been making mistakes. Instead, they’ll learn of their errors as they happen. This not only addresses issues in real-time but lets employees improve from day to day.

Yet, probably the most effective benefit of performance management software is that performance reports can be utilized as a guide from the future rather than a criticism of prior work. You’ll be able to show where employees have succeeded and give them the means to improve on their weaknesses.

Identifying and rewarding employees who meet your standards and go beyond them also has a two-fold effect. As an employer, you’ll be able to identify rising talent and facilitate their rise into higher positions. Less productive employees will see their colleagues receiving recognition for their work and strive to achieve the same level of success.

At the end of the day, continuous feedback with your employees simplifies your end of performance reviews but it also empowers them to take charge of their training and position in the company. Your employees will feel more satisfied knowing that they are not being harshly judged once a year, that they have the means to improve themselves, and that you are on their side. Your entire corporate culture will see an improvement.

Frequently Asked Questions

With so much to consider, we know that you probably have a few questions of your own. To help you out, we’ve gone ahead and answered a few of the most common questions.

Is it worth overhauling my entire performance management process?

The good news is performance management software is relatively inexpensive. Compared to the time and money lost by individually assessing every employee, the cost of this software is low. Because any decent system is hosted through an online cloud-based platform, you don’t have to pay for installation fees or additional hardware. Simply pay a monthly subscription fee and you’ll have access to a secure and streamlined platform.

The benefits of eliminating annual performance reviews in favor of continuous feedback are certainly worth it. Your employees will appreciate it, your human resources department will appreciate it, and you’ll be able to see the change in your office. In short, yes, it is worth overhauling your performance management process.

What do you mean by “continuous feedback”?

Continuous feedback means that you approach performance reviews as an ongoing conversation with your employees. Rather than giving them a one-time assessment, you work together to address the employees’ strengths and weaknesses. Staying in constant dialogue with your workers means that they can develop better skills throughout the work year rather than after an annual performance review.

By opening lines of communication, employees won’t view their feedback as criticism but as a constructive and caring push in the right direction. They can request more training where they need it and really prove that they have the drive to move up in the business.

What are some common mistakes made by implementing performance management software?

When it comes to any software, many of the most common mistakes result from getting a product that’s too complicated for the user. Implementing the system is the most important step. It may involve a small learning curve to get everyone on board. Therefore, you must find a service that’s straightforward enough for everyone to use.

If you’re having to retrain the entire company to use a new performance management system, you’ve likely purchased something too advanced. You should look for a product that tracks employees’ performance, compiles data into workflows, and allows for continuous feedback between employers and employees. Any added flairs may seem attractive but they can leave you with a clunky and user-unfriendly platform.

How does performance management software help employees meet their career goals?

Through the online platform, administrators or managers can post the organization’s goals for the year. Employees will then have access to the company’s expectations and standards and can work towards fulfilling them. If they require more training to meet the company’s goals, they can submit a request and receive the necessary skills.

Performance management software aims to create open lines of communication between management and the employee. This way, both parties can be transparent about their career goals. The employer can clearly set out what they expect and the employee can lay out where they want to go within the company.

Is performance management software safe?

We get it. Knowing that your employees can access their company data from anywhere and at any time can easily lead you to wonder how secure your data is. You want it to be easily accessible but you also don’t want it to be accessible to just anyone. Rest assured that everything is kept safe from outside entities.

All data entered into the performance management software should be kept within a data encrypted digital cloud. Be sure to talk to whatever service you end up going with but a quality system should guarantee regular and automatic updates to keep your information protected.

Conclusion

If you know that annual performance reviews cause more headaches than solutions, it may be time to update how your company provides its employees with feedback. In a digital age, sticking to the old method of yearly employee evaluations can leave your company and employees frustrated, stressed, and looking for more.

Upgrading to a digital online performance management system will assure your employees continuous feedback, open lines of communication, and a healthier, more accessible path to improving their productivity. Don’t treat your employees’ performance reviews as a one-off laundry list of things they need to work on. Work with your employees for the benefit of the whole company. Make the switch today and you won’t regret the changes in your business.