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Performance Management Meets the Wisdom of Crowds

If recognition is thoroughly woven into the fabric of your culture, it becomes a true measurement tool of individual and organizational performance

By Eric Mosley, CEO, GloboForce

Performance reviews are broken:

Begin With The Name

The biggest problem with the annual performance review is that it’s annual. Getting feedback – good or bad – once a year simply doesn’t move the needle on employee performance. Feedback delivered only on rare occasions doesn’t help people improve performance on an ongoing basis.

On the other hand, giving people immediate feedback increases the probability that the feedback will be instructive and useful. Let’s look at some of the other inherent shortcomings of the traditional performance management process based on annual reviews:

They’re forced. We’re simply not wired for infrequent feedback. Growing up, we didn’t have rigid performance reviews with our parents. If we misbehaved, we heard about it immediately. If we behaved well they showered us with positive reinforcement. Our parents didn’t sit down with us at the end of the quarter or end of the year to review our performance. We expect and crave more frequent communication on the value and impact of our contributions.

People hate them. Employees dread performance reviews – and managers dread them too. Few people enjoy the feeling of being on trial – and just as few enjoy being on juries. In fact, according to a recent Globoforce Workforce Mood Tracker, 52% of U.S. employees don’t think annual performance reviews are an accurate appraisal for the work they do.

They happen for everyone at the same time. Trying to squeeze all employees through a performance review process within a two-week period is daunting and a bit silly. Employees need feedback at different points in time, and managers need time to focus on the unique needs of each employee.

They’re biased. A manager isn’t necessarily the best judge of a direct report’s performance. Traditional reviews force one person’s viewpoint on somebody else. There might be personality issues. The manager might not have good “visibility” into the value and total contribution of an employee. The manager may simply not be equipped to give meaningful feedback.

The Wisdom of Crowds

What if there was a better way to evaluate an employee’s true performance and impact within an organization? The concept behind the “wisdom of crowds” is that collective knowledge trumps individual knowledge. When we tap into the knowledge and/or opinions of a group of people rather than a single expert to answer a question, we end up with a more informed and complete picture of reality.

A related concept is “crowdsourcing,” which facilitates people from a broad audience to offer their knowledge and opinions. One well-known example is Yelp, which has created a network of restaurant and store reviews from average users rather than just newspaper and magazine writers. The result is 22 million reviews on virtually any retail store in many countries around the world.

Similarly, Wikipedia crowdsourced the encyclopedia so that anyone who has knowledge on any topic can contribute. The result: Wikipedia today has 20 million articles and is one of the top ten most visited sites in the world. More than ever, it’s easy for people to give and receive information. And enterprising individuals can imagine and build clever ways to aggregate and curate that information to make that collection of information useful and meaningful.

The same can be true for aggregating performance feedback in the workplace.

The Wisdom of the Workplace

Imagine a workplace in which you could crowdsource performance management. What would that look like? How would that work? First, step back and envision how a truly pervasive performance feedback loop might begin to form. Think back to Yelp and Wikipedia and why they work. A lot of it boils back down to human nature. In the case of Yelp, its ability to gain critical mass is predicated on the simple fact that people enjoy sharing their restaurant experiences, and people want restaurant reviews when deciding where to go. As for Wikipedia, sharing knowledge is simply fundamental to humans and to societies at large.

So the question becomes: What is a fundamental thing people like to get in the workplace? One answer is that they like to be thanked. And most people also enjoy giving thanks. If your company had a common system or platform for giving and receiving recognition, common sense and human nature would dictate this platform would get traction.

Now, let’s imagine you have that platform in place. And just like Yelp or Wikipedia, it starts to gain critical mass. And like Yelp and Wikipedia, once it gets critical mass it becomes self-reinforcing. Once people become more consciously aware of how much they like thanking others and being thanked, they tend to do so more intuitively. Recognizing others – providing timely, appropriate feedback – becomes part of the company’s collective behavior patterns. It becomes part of the company’s culture.

Crowdsourcing Performance Management

With a culture of recognition in place, you now have the foundation to feed constant, crowdsourced feedback into your performance management system. With strategic recognition, not only do you tie recognition to company values in an explicit and public way, you also have a platform that allows you to conduct meaningful analysis. If recognition is thoroughly woven into the fabric of your culture, it becomes a true measurement tool of individual and organizational performance.

At a glance, you can see who is valued most in the company, which departments are embracing specific core values the most, which departments seem to be servicing other departments well and how that’s trending over time. You have ways to measure what were previously considered intangibles.

Wins Across the Board

People are motivated by recognition. When they’re motivated, they’re far more likely to put forth discretionary effort. They’re also far more likely to work in a way that benefits their coworkers. Management is equipped with more data from myriad input points (anyone who has given recognition to another employee) throughout the entire year rather than one input point (the specific manager) at one point in time.

By implementing a strategic recognition program, you build the framework to blanket your workforce with positivity, increasing emotional bonds between the employee and the company, while delivering information through the wisdom of crowds that you’ve never had access to before.

Eric Mosley Co-Founder and CEO of GloboForce, has made it his mission to raise employee recognition from a tactical, unmeasured and under-valued effort to a global strategic program with clear measures for performance and success. More information at www.globoforce.com/.

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