Turning the Employee Appraisal Process Inside Out

Recognize This! – Instead of layering more confusion on top of a broken appraisal system, start over with a Crowdsourced Performance Review.

The Sunday Times just featured my CEO’s new book The Crowdsourced Performance Review, including a brief case study of how this works at Intercontinental Hotels Group. A few of my favorite excerpts are below with my comments, but I encourage you to read the entire article for much more color.

Why Not 360-Degree Reviews?

Frankly, the 360-degree review process just adds layers of complexity and additional oversight (and nagging) to an already broken process. No one trusts in “full anonymity” and the opportunities to game the system are rampant.

“More recent efforts to improve the appraisal process — largely with the ‘360-degree review’, where a couple of colleagues will also be asked for their opinions — have fallen flat, he said. ‘Studies have shown that 360-degree reviews have ended up being quite political — it’s often a case of “if you scratch my back, I’ll scratch yours”,’ said Mosley.”

HR’s Loss of Faith in the Annual Review

Even HR agrees that the traditional review process is no longer fit for the modern world. If nearly all of us agree we just can’t keep inflicting this failed mechanism on our employees anymore, why do we keep doing it?

“Many in HR agree that the traditional review has had its day. A recent survey by Globoforce and the Society for Human Resource Management found that 45% of HR leaders think annual performance reviews are not an accurate way to appraise employees’ work. What’s more, 42% think employees are not rewarded fairly for their performance.”

Crowdsourcing through Peer Recognition

Big data is revolutionizing industry – all industries, from many different levels. This is no less true in HR. With strategic, social recognition, you generate much more data, making crowdsourced reviews possible.

“Crowdsourcing — making use of the wisdom of crowds — is increasingly a method used by organisations and individuals to solve all sorts of problems, from financing small businesses with crowdfunding to gathering opinions on contractors and freelancers online. Why not use it to haul the appraisal process into 2013, said Mosley.”

How It Works at Intercontinental Hotels Group

But don’t take our word for it. Here’s how it works at IHG:

“Ly Bui, a HR specialist at the Intercontinental Hotels Group, is one of the senior team responsible for a new appraisal scheme by which the company has changed the way it recognises and rewards employees. So far, the system has been rolled out to about 8,000 employees worldwide…

“The social recognition programme being used by Inter- continental means employees can give each other ‘Bravos’ — virtual recognition for a job well done. ‘Somewhere in the world a Bravo is given in our group every six minutes,’ said Bui. The system is ‘flat’ in that staff at grass-roots level can recognise one another’s accomplishments, as well as those of their manager. And it’s not just a case of getting a virtual gold star: there are rewards of up to $500 (£300).”

What part of the annual review process do you dread the most?

Derek Irvine

About Derek Irvine

The VP of Client Strategy and Consulting at Globoforce, Derek Irvine is one of the world’s foremost experts on employee recognition and engagement, helping business leaders set a higher vision and ambition for their organizations. As a renowned speaker and co-author of "The Power of Thanks" and "Winning with a Culture of Recognition," he teaches companies how to use recognition to proactively manage company culture. Derek holds a B.Comm and Masters of Business Studies from the Smurfit Graduate Business School at University College Dublin.

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