The performance review process has been undergoing a shift over the years. For instance, in contrast to the past, modern-day employees demand constant feedback from their employers ( Fletcher, 2001) . Specifically, today’s employees do not have the patience to wait for their performance review after six months or at the end of the year. On the other hand, the current state of the corporate and business environment has become both rapid and dynamic. Thus, while it was difficult to provide employees with continuous feedback, there are various today that make this easier ( Pfau et al., 2002 ). The same applies to the skill sets that are on demand in the marketplace today. This is because as demands of the global business environment shift, entities have to adjust their job requirements and mode of operations. Currently, the human capital management system (HCMS) has to be anchored on data-driven and real-time feedback. Given the above changes, human resource (HR) based decisions have to ensure that there are continuous update and upgrade of skills. For this to be successful, it has to be backed with constant feedback. While this requirement is currently essential, in the future, it will be mandatory for the success of any business entity. At the center of this narrative is the need for a more comprehensive and responsive approach to performance appraisal. This paper will compare and contrast traditional annual evaluation performance appraisal with its real-time feedback coaching system.
The traditional annual employee performance review approach is the most common performance appraisal system. The model is used in assessing performance, justifying compensation raises, and in providing feedback ( Pfau et al., 2002 ). This performance appraisal method is solely used in evaluating the performance of employees and thus excludes development and planning. Also, its core purpose is the determination of financial rewards. The method is top-down, centralized, bureaucratic, and impersonal. Often, traditional performance appraisal discourages participation of the employees that are being assessed. Owing to these attributes, the conventional ratings and rank-based system boasts numerous shortcomings. The approach results in elevated levels of frustration amongst employees, it pits employees against one another and fosters disengagement ( Pfau et al., 2002 ). Due to comparing of employees collectively as opposed to assessing them as individuals, they become disengaged. Owing to this, these employees might find it challenging to make use of the feedback received.
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The annual evaluations are likely to be ineffective particularly since the focus is given to things and milestones that were accomplished over a long period. This feature is especially detrimental for a workforce that is comprised of millennials. Often, millennials are more interested in receiving real-time feedback due to the value they attach to this in terms of raising their level of performance ( Anderson et al., 2016 ). Since millennials form the first group of employees to grow up in an era of both instant and constant communication, they are more predisposed to demand fast, relevant, and frequent feedback. It is such aspects that inform the need to shift from the traditional performance review process to one that accommodates this emerging demand. Thus, more and more entities are moving away from this conventional approach. Some entities, while making the shift, have gone as far as getting rid of systems that have been deemed the most rigid. In such systems, employees are reviewed annually, their performance compared to that of their colleagues, and the least performing fired ( Fletcher, 2001 ). Real-time feedback performance appraisal uses a different approach. For instance, direct reports and managers are used informally and regularly to review and revise priorities based on customer needs. Subsequently, personalized feedback is given immediately using such tools as mobile applications. Owing to the shortcomings of the traditional annual ratings and ranking-based system of performance management, minimal rise in performance is associated with it. In some instances, the system has been related to alienation of top performers and reduced employee engagement.
The traditional approach to performance appraisal offers little motivation to employees. Likewise, a lot of time and resources are spent in filling the forms and accumulating quantitative information instead of providing returns in the form of qualitative information ( Pfau et al., 2002 ). The supporters of traditional performance appraisal are increasingly diminishing as more companies reinvent their performance appraisal processes. In the traditional performance appraisal process, managers may end up accumulating up to one year of feedback while waiting for the annual appraisal meeting. This feedback may either be negative or positive, and its application in the day-to-day company operations though extremely important is delayed. The managers may be overwhelmed by workload implying that they end up relegating provision of feedback. Interestingly, it is the best performers that end up receiving feedback last. Since such feedback is crucial to improving their performance, delaying feedback has an unprecedented adverse impact on a company's overall performance ( DeNisi & Pritchard, 2006; Fletcher, 2001 ). Conversely, failure to give poor performers prompt feedback leads to an escalation of their shortcomings which could spiral into more crises. This is because constructive criticism when received on time, is more important than that which is received. The traditional performance appraisal is also deemed to be more subjective due to the impact of human bias on the rating process. These biases influence the managers' perception and rating of team members, rendering the feedback ineffective.
Companies globally are shifting from the traditional performance appraisal to a more modern and continuous alternative to performance management ( Anderson et al., 2016 ). This is due to the gaps associated with traditional performance appraisal. In the alternative, real-time feedback is given to the employees leading to continuous improvement in performance. As more and more established corporations realize how effective the provision of regular feedback to employees can be, the adoption of this approach is expected to rise. Real-time provision of feedback helps in making employees feel appreciated and recognized for their current and not annual accomplishments ( Pfau et al., 2002 ). It’s also useful in improving the quality of feedback received since it is focused on current performance. This helps employees in making behavioral adjustments that are vital in the achievement of immediate productivity improvement ( DeNisi & Pritchard, 2006) . Real-time feedback also helps in the creation of a valuable and inspiring dialogue between an employee and an employer. This is found to be more useful than the conventional top-down assessment. For instance, the employees acquire unique feedback and are not limited to a set of pre-determined questions. Most importantly, high performers are exposed to the tools needed to promote immediate success. Moreover, real-time feedback converts performance review into a form of continuous coaching. Examples of real-time feedback include routinely-held remote catch up sessions, one-on-one meetings, engagement surveys, real-time recognition programs, and feedback apps ( Hassan, 2016 ).
I support real-time feedback coaching as opposed to the traditional annual reviews. This is due to the numerous benefits associated with real-time feedback coaching system relative to the traditional annual reviews. In particular, I reckon that real-time feedback is a better option in the modern-day business environment that is highly fast-paced. Today’s business entities are also mostly comprised of tech-savvy employees who compared to their older colleagues, are less patient. I also think Frederick W. Taylor would have been supportive of the real-time feedback coaching system. This is mainly due to his emphasis on proper management of time, and its role in improving productivity. This would be supportive of his position on the need for management commitment and gradual improvements. For this to happen, he reckoned that change in the habits and attitudes of both managers and employees. These changes would be crucial in enhancing efficiency. Real-time feedback coaching makes it possible for these to take place. It is due to this that Taylor would support this approach.
References
Anderson, E., Buchko, A. A., & Buchko, K. J. (2016). Giving negative feedback to Millennials: How can managers criticize the “most praised” generation. Management Research Review , 39 (6), 692-705.
DeNisi, A. S., & Pritchard, R. D. (2006). Performance appraisal, performance management and improving individual performance: A motivational framework. Management and Organization Review , 2 (2), 253-277.
Fletcher, C. (2001). Performance appraisal and management: The developing research agenda. Journal of Occupational and Organizational Psychology , 74 (4), 473-487.
Hassan, B. (2016). Using mobile app for employee performance appraisals.
Pfau, B., Kay, I., Nowack, K. M., & Ghorpade, J. (2002). Does 360-degree feedback negatively affect company performance?. Hr magazine , 47 (6), 54-59.
