As businesses look to improve employee performance and help workers meet individual and team goals, it’s time to rethink performance management — the strategy organizations use to manage, measure, and improve employee performance — and give it an upgrade.
There’s no clear record of the first performance review, but Harvard Business Review reported that by the 1940s, 60% of companies were conducting performance appraisals. Yet, despite having more than 80 years to perfect this practice, most companies still think their performance management process falls short: The 2019 Global Performance Management Study by asset management and research firm Mercer found that only 2% of companies worldwide believe their performance process delivers high value, and only 2% believe they have excellent feedback practices.
This data starts to get at the heart of the problem with the traditional annual review performance management systems — the process has historically focused on analyzing past performance, rather than providing the feedback, resources, and coaching needed to improve performance for the future.
Amending your performance management process to include continuous feedback, a system to more regularly facilitate the exchange of feedback within an organization, is a smart way to build a better performance management strategy. Let’s take a closer look at continuous feedback, its benefits, and the value it can bring to your organization.
What Is Continuous Feedback?
Continuous feedback is a Human Resource strategy that seeks to encourage and empower the exchange of feedback on a regular basis between managers and employees, as well as peer-to-peer. Some of the key features of continuous feedback are:
1. It complements performance reviews.
Continuous feedback and performance reviews don’t have to be an either-or situation. “Continuous feedback and annual performance reviews aren't mutually exclusive,” said Daivat Dholakia, Director of Operations at fleet-tracking app Force by Mojio. “In fact, they're highly compatible.”
Dholakia said companies that rely on both to strengthen their performance management strategy will benefit from a more streamlined annual and mid-year review process, while supporting employees in meeting their goals along the way. “Since continuous feedback allows employees to constantly receive information and evaluations about their work, annual performance reviews can function more like an overarching long-term retrospective on each employee's progress and goal achievement,” Dholakia noted.
2. It includes informal feedback — but isn’t limited to it.
Cultures of continuous feedback include the impromptu “Great job!” exchanged in passing, but aren’t limited to informal affirmations. At the heart of successful continuous feedback programs is a strategy that ties together goal-setting, constructive feedback, everyday praise, and open communication between managers and employees, and peer-to-peer.
“Informal continuous feedback models without a formalized plan almost always fail,” cautioned Janelle Owens, Director of HR for online education company Test Prep Insight. “Managers start skipping reviews, employees get sheepish asking for feedback, and feedback slowly comes to a stop.”
To counter this, Owens said HR departments should crystallize a formal plan, like with any other performance management system. “By memorializing the plan in writing, your organization is much more likely to stay committed,” she said.
3. It relies on one-on-ones as a cornerstone.
While feedback should be exchanged informally, both in-person and digitally, a continuous feedback system relies on regular check-ins between managers and employees. “You’ve used hallway chat to talk about the great [job an employee has done] and the opportunities [you see for them], and the one-on-one is where you can dive deep on them,” said executive coach James Osborn.
One-on-ones ensure performance conversations are taking place regularly. “They’re the weekly checkpoint to look at progress, and to summarize what’s happened and what’s up next,” Osborn said.
Mercer’s 2019 Global Performance Management Study also found that employee feedback is most effective when it is “specifically connected to the employee and personalized to the learning experiences that will accelerate their contribution and acquisition of new skills.” As well as providing a dedicated time to share feedback with employees, one-on-ones are also a chance for managers and employees to get to know each other better so managers can provide more personalized feedback to their direct reports, thus increasing the efficacy of their feedback.
4. It helps employees meet their goals and OKRs.
An important feature of continuous feedback is the frequency of checking-in: Managers and employees will be having regular conversations to discuss performance, progress, and opportunities for improvement, which supports employees in meeting both their short-term objectives and long-term goals.
“When there [are] regular progress check-ins against a set of goals, it’s easier to design action plans on the part of the employee and prioritize objectives to raise productivity,” said Michael Hammelburger, CEO of The Bottom Line Group, a cost-reduction and tax analysis firm.
Continuous feedback eliminates the lag time of the traditional annual review, where employees are receiving feedback on events that may have long since passed. Instead, the regular cadence of conversations and feedback inherent in the continuous feedback model helps employees adjust where needed, and offers managers the opportunity to remove blocks or provide resources to help employees meet their objectives.
Benefits of Continuous Feedback
Consider supplementing your organization’s performance management system with a framework of ongoing feedback to take advantage of the following benefits of continuous feedback:
1. It drives employee growth.
Implementing a system of continuous feedback facilitates regular conversations around employee growth and development. And since short- and long-term OKRs are a key part of any successful continuous feedback framework, employees will be taking an active role in setting and discussing goals with managers, which boosts employee development.
2. It provides real-time insights.
Thanks to the open, honest conversations and actionable suggestions regularly occurring between managers and employees, continuous feedback helps address issues and remove barriers before they become problems that threaten project or team success — or even worse, result in high employee turnover. Because employees are routinely receiving information on what they’re doing well and where they can improve, continuous feedback also helps mitigate the risk for recency bias — where a manager is primarily focusing on an employee’s most recent successes or shortcomings — which can be a common pitfall when substantial feedback is only being delivered one or two times a year, as happens when relying solely on more formal reviews.
3. It improves employee engagement.
According to an article on Gallup, “research shows that having conversations about development can improve employee engagement, which can in turn improve productivity and profitability.” We also know that the employee-manager relationship is an important component of high employee engagement. The Predictive Index’s People Management Study revealed that the amount of feedback an employee receives is closely correlated with how highly they rate their manager. In fact, “when it comes to how much feedback managers give, employees give higher marks to managers who err on the side of giving too much rather than too little,” noted the study.
4. It facilitates stronger relationships.
Feedback requires vulnerability on the part of the person giving the feedback and the person receiving it. For the individual offering feedback, they must summon the courage to share their observations or experiences, and for the receiver, they must be open to hearing someone else’s opinion of their performance or behavior. But it’s precisely this vulnerability that bolsters psychological safety — the belief that an individual will not be punished or humiliated for speaking up with ideas, questions, concerns, or mistakes — and therefore helps staff members build stronger relationships at work.
The Link Between Feedback and High-Performance Cultures
Because Carter was adamant about using technology to facilitate feedback, Patagonia was able to identify trends around feedback and performance. “Before technology, things happened in the dark. We had no idea what was going on,” said Carter in his interview on XM Blog. But with the use of technology, the company found that employees who regularly exchanged feedback performed at a higher level — and received bonuses that reflected that.
According to Carter, employees who regularly exchanged feedback through Patagonia’s digital system were more likely to hit their goals, and received 20% higher bonuses. Figures that, when we consider what we know about ongoing feedback — that it helps employees grow, provides real-time insights, boosts employee engagement, and strengthens relationships at work — shouldn’t surprise us.
For businesses looking to strengthen their performance management strategy and build a high-performing workplace culture, implementing a system of continuous feedback is an effective way to achieve this.
How Lattice Enables Continuous Feedback
At Lattice, our real-time feedback tool allows you to give in-the-moment feedback and support your performance management strategy of setting goals and maximizing the effectiveness of your one-on-ones. Exchange feedback from wherever you work with our Slack, Lattice Mobile, and email provider integrations, and never lose track of the feedback you give or receive. With Lattice, you can easily share and receive thoughtful feedback, everyday praise, and suggestions for improvement, all from one easy-to-use platform — and start experiencing the benefits of a continuous feedback culture right away.