NICE JOB

Companies are automating performance reviews so that millennials get the frequent feedback they crave

Obsession
The Office
Obsession
The Office

Annual performance reviews were not built for employees who want regular feedback, and perhaps that’s one reason they’re going out of style. Accenture, Adobe, Deloitte, Microsoft, and General Electric have all abandoned the yearly ritual.

The emphasis now is on “continuous feedback” systems. For instance, SAP SuccessFactors, an HR software used by 6,000 companies and 45 million workers, added a feature in February to its performance review process for “ongoing one-on-one check-ins between employees and managers.”

Startups like Lattice, TinyPulse, and Zugata take the concept to the extreme with quick reviews that are often meant to be completed every week and sometimes coordinated automatically. TinyPulse CEO David Niu, whose customers include Facebook and IBM, promised that a new product launched in February would capture “all the real-time data people crave to measure performance, all while keeping it fun.” By fun, he meant, for instance, that managers and employees can assess progress on their goals with a Tinder-like swipe-to-rate system.

Zugata, which is used at more than 500 firms including the ride-hailing company Lyft, analyzes employee communication on project-management platforms, emails, and chat apps like Slack to figure out who works closely together so that it can coordinate weekly peer reviews. Coworkers then evaluate each other by flipping through a virtual flash-card deck and rating their colleagues on a series of skills (options include “rocking it” or “getting there”).

Based on the assessments, Zugata sends the employees materials they can use to improve in the areas where they’re lagging, though the focus overall is on positive feedback.

It’s tempting to blame (or credit) the frequent feedback trend on coddled young people who won too many “good try” trophies throughout their youth soccer careers or who, as Twilio CEO Jeff Lawson recently put it, “grew up with the internet [and] just expect quick feedback on things.”

While millennials now make up the largest generation in the US workforce, Zugata CEO Srinivas Krishnamurti pushes back on the idea that the need more for more frequent, positive feedback is a millennial-only concern. “When we started the company, that was one of our assumptions,” he said. But “I don’t necessarily buy that it’s a new thing or a millennial thing. Everything is moving much faster. I think that this is just one thing that hasn’t kept up with everything else that’s moving in our lives.”

Indeed, research shows that annual reviews are hated by almost everybody, and may actually hurt performance.

A survey of companies by Deloitte in 2015 suggested that performance-rating systems themselves are under review far and wide, with 90% of respondents saying they had updated their systems in the previous 18 months, were currently evaluating them, or planned to review them over the next 18 months.

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