While refining what seems to be an ever-evolving approach, designers of new performance management systems should personalize at least some aspects of their solution in a meaningful way, suggests new research from Columbia Business School.
Customizing a performance app’s home screen isn’t enough. The product’s actual evaluations must contain comparisons of each individual’s performance to their past work if they’re going to be effective. Besides showing a simple sense of fairness, the researchers—led by Columbia Professor Joel Brockner—says this also encourages a more positive relationship between employer and employee, and thus improves the employee experience and increases engagement.
“Our findings show that, simply put, the process matters,” Brockner said. “In order to improve upon the fairness factor and thereby better ensure employees accept the feedback, managers must acknowledge the individual identities of their workers and their specific contributions to the organization over time.”
Remaking Performance Management: How Much is Too Much?
Ever since younger workers and mobile technology combined to force a rethinking of performance management, a variety of HCM technology companies have tried to put their own spin on providing workers with feedback. Innumerable articles have been written on the death of the annual review, the spread of real-time feedback and the availability of critiques from sources besides the manager.
Over the last five years or so, many employers made dramatic changes in their approach. PwC and Adobe, for example, launched programs that relied less on scores and more on conversations. Other organizations instituted more frequent check-ins between workers and supervisors.
What hasn’t gotten as much attention is the fact that, when employers diligently pursue traditional performance reviews, employees find them valuable. When Facebook discussed the issue to its workforce several years ago, it found that 87 percent wanted the company to keeps its process in place.
“Yes, performance evaluations have costs—but they have benefits, too,” wrote Facebook’s Lori Goler, Janelle Gale and Wharton Professor Adam Grant in the Harvard Business Review. “We decided to hang on to them for three reasons: fairness, transparency, and development.”
According to the authors, Facebook didn’t see its process as a panacea. They readily acknowledged trade-offs but noted that, “Performance reviews were put in place for good reasons; discarding them entirely might be an overreaction to how they’re often executed.”
That last phrase–“how they’re often executed”–is the key.
For all the talk of new approaches to performance management, a remarkable number of employers are sticking with more traditional processes, at least according to employees we’ve spoken to at companies large and small. When organizations take the process seriously, that seems to be OK with them. It’s when managers put off reviews, cobble them together at the last minute and hold up the accompanying paperwork for an annual raise that people get unhappy.
But inertia isn’t the only danger. Brockner’s research found that employees are more receptive to reviews based on their own past performance rather than comparisons to their peers’ work. Such individually focused reviews are more likely to be seen as fair, and this improve both productivity and morale.
‘Temporal’ vs. ‘Social’
Brockner and his team compared two common approaches to employee appraisals: “temporal comparisons,” which look at how an individual’s performance compares to their past work, and “social comparisons,” which measure performance relative to peers.
The researchers found that temporal comparisons yielded better results because employees saw them as more fair as well as more personalized. They signal that each worker is important as an individual, and sets up a dynamic where they’re more open to both positive and negative feedback.
On the other hand, social comparisons leave employees feeling something like a cog in the machine because they often lack specific details about individual performance. That, in turn, makes workers less receptive to feedback.
That’s not to say social comparisons have no value, Brockner found. They can be used to structure an equitable reward system, for example, or encourage healthy competition to improve individual efforts.
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