The Performance Review Is Dying. Make Way for a Fire Hose of Feedback.

 Companies are starting to train employees on how to give feedback to their peers and managers. (Image: Pixabay)
Companies are starting to train employees on how to give feedback to their peers and managers. (Image: Pixabay)

Summary

Sticky notes in meetings, co-workers’ input and AI evaluations will keep workers constantly informed of their performance.

Forget the annual performance review. Get ready for constant, never-ending feedback.

Many employees now have to wait a year for feedback, often given in a stiff and rushed meeting. Workers aren’t always able to respond to the evaluation or offer their own to their boss. Even though many employers agree there are more effective ways to deliver feedback, the system has largely stayed the same while companies focus on bigger priorities such as increasing revenue and reducing costs, executives say.

But in the future, companies might change their approach to get more efficiency from their workers, led by a new generation of leaders who are already trying to make their workplaces more transparent. Companies are starting to train employees on how to give feedback to their peers and managers. They are pausing meetings to share real-time critiques. Increasingly, artificial intelligence could evaluate workers’ emails and videoconference meetings to give performance assessments.

These leaders predict candid, real-time assessments could become more relevant. Such feedback could allow workers to lose the fear of retribution for speaking up about their peers’ work, and hear the good and the bad more often, in turn giving everybody the opportunity to make changes year-round and become more productive.

Peer-to-peer

At the startup Fountain, the company often hands out sticky notes in the middle of meetings involving two teams. Each group evaluates the other by scoring them from one to 10, ranking how helpful the other team has been during their collaboration, says Sean Behr, chief executive of Fountain, which creates software to hire and manage retail, grocery and delivery workers.

A facilitator then collects the scores and shares them aloud before leading a discussion about each team’s overall effectiveness, Behr says. He adds that teams are sometimes surprised to get a low average score when they thought they were doing a good job.

“It is a very eye-opening process," he says. “When you show them five versus eight, immediate changes happen." After the sticky-note break, the meeting agenda often shifts based on what they just discussed about each team.

The past decade’s environment of lavish corporate growth and hiring sprees is gone, says Behr. That means feedback will need to help companies squeeze more efficiency out of their workforce, he says. Fountain worked with an executive coach to retool its feedback systems and improve employee productivity.

When Fountain’s engineering and customer success team recently scored each other, the success team was rated an average of six while the engineers received a four, Behr says. The success team, which works with the company’s clients, said the engineers were neglecting to fix some small bugs in favor of more sweeping changes. Now the engineers plan to dedicate five days a month to nothing but smaller bug fixes, Behr says.

Everyday feedback

Personalized feedback is a part of the culture at e.l.f. Beauty. Employees on their first day take the Myers-Briggs Type Indicator, a personality test, so their co-workers know how they process information, says Tarang Amin, chairman and chief executive. The makeup company expects workers to regularly give each other feedback but discovered that they initially didn’t always feel comfortable doing so, he says.

“Often what we find is it is because the people didn’t know each other well enough," Amin says. “Before you do any work at e.l.f., you have to get to know your peers extremely well. I want you to know their kids’ names. I want you to know what’s important to them."

Amin says he wanted to create a more transparent company culture when he first began leading the company in 2014 and prepared to take it public.

Oakland-based e.l.f. trains its more than 300 employees on how to give feedback by hosting workshops and offering sessions with a performance coach on retainer, he says.

The company doesn’t conduct annual performance reviews but instead wants people to receive feedback every day, so it hires workers that will be receptive to criticism. Teams are expected to train each new hire on the company’s constant-feedback model.

Amin says he has noticed younger employees are more comfortable sharing feedback online through direct messages, but the company also encourages face-to-face feedback.

“If you don’t give feedback, then you’re actually not helping advance the culture," Amin says. “Everyone gets it in the spirit of helping the team succeed."

Technological advances

As companies shift away from traditional performance assessments, artificial intelligence could have a big role in candid feedback.

Some tech companies are already experimenting with AI software built into virtual meeting systems and videoconferencing, says Keith Ferrazzi, chairman and chief executive of Ferrazzi Greenlight, which coaches teams and is working with companies developing the software.

Such technology can offer powerful insights to employees and managers on what they could do better during meetings and other interactions, says Ferrazzi.

“I want my videoconferencing system to tell me at the end of that meeting, ‘Keith, you cut off Jane twice,’ " he says, “or, ‘You dominated that conversation 70%.’"

Ferrazzi added that he is also working with companies developing another similar technology: AI that analyzes workers’ emails and prompts workers to pitch an idea they have repeatedly written down.

At executive-education company Radical Candor, AI is being used in the form of a chatbot that helps workers rehearse giving difficult feedback to each other.

“There is less feeling of shame of getting it wrong with a chatbot," says Kim Scott, executive coach and co-founder of Radical Candor. Workers might find out from the chatbot if the feedback they gave was constructive or biased, Scott adds.

Radical Candor is also using the chatbot to train workers at other companies on feedback, and help people at workshops role-play how to offer critiques to a defensive employee, says Scott.

Managers on the receiving end

Managers are already starting to get feedback from their direct reports, says Becky McCullough, vice president of global recruiting and talent development at HubSpot, a marketing software company.

To encourage “upward feedback," HubSpot offers an annual survey for direct reports to evaluate their managers, McCullough says. Bosses are encouraged to discuss their results with the team and share what they plan to work on. That has allowed managers to grow as leaders, she says.

McCullough also asks for regular feedback from her team, saying, “What is one thing I could do better or differently to support you?" She solicits the critique to model how she wants them to ask for feedback, something she predicts more bosses will do one day.

At San-Francisco based software-maker Atlassian, an internal tool built by the company helps employees share feedback to their peers, bosses and direct reports. Each person’s name is attached to the feedback so workers can follow up with them, says Erika Fisher, chief administrative and legal officer at Atlassian.

The tool forces them to get to the point within a 500-character limit, because feedback is most effective when it is specific and actionable, Fisher says.

Navigating the flood

With the trend toward constant feedback, employees will need to learn to maintain professionalism during extremely honest conversations and interpret feedback with a dose of skepticism, say company leaders.

People will have to decide which critiques they agree with, says David Rogier, co-founder and chief executive of MasterClass, an online education platform. “Just because somebody gives it to you doesn’t mean that you have to take that as the truth or being right," he says.

At e.l.f. Beauty, chief executive Amin says continuous feedback makes his workers more engaged. No employee has ever cited e.l.f.’s feedback culture as a reason for leaving the company, he says.

“Over time," he says, “it gets more and more natural."

Write to Alyssa Lukpat at alyssa.lukpat@wsj.com

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