Why Companies Are Switching to Agile Performance Reviews

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Why companies are switching to agile performance reviews

Introduction

For so many years, organizations have viewed the annual performance review season as the most dreaded season. Employees see it as an isolated form of feedback that happens once a year and managers have attested to the time-consuming factors of its process.

The monotonous pattern and lack of insights into improvement areas these performance reviews possess make it even more difficult for both parties to fully indulge in this activity.

Companies have resorted to the agile performance review approach to evaluate their employees to eliminate the hassles associated with traditional performance reviews. What does this new performance practice mean and why are leading companies are switching to it?

 

What is an agile performance review?

Agile performance review is a continuous and more comprehensive feedback system. It embraces the idea of assessing employee performance more frequently, as opposed to the traditional review process which is done once or twice a year. 

Agile performances are more communicative and collaborative, as managers and employees discuss the process of achieving certain goals and continuously address roadblocks that hinder their progress.

For a better and seamless experience, agile performance reviews are complemented with performance software and tools. The main function that differentiates agile performance review is its frequency. Discussions on performance and progress tracking are done more frequently than usual.

 

1. The need to appropriately recognize hard workers

Agile performance review develops a recognition culture, where employees are rewarded for hard work. As seen in Google, a line is drawn between performance evaluation and compensation. The tech giant is always willing and ready to reward its high-performing employees after every evaluation process. In most cases, these rewards aren’t monetary. Google places more value on skill development than compensation with cash.

When employees are compensated, the urge to do more spikes, which in turn increases the overall productivity at your company. With a recognition culture, employee engagement becomes easier to achieve over time. 

 

2. The need for frequent and meaningful conversations

The key to effective agile performance lies in frequent and meaningful conversations associated with employee performance. Employees and managers get to talk about areas that need improvement more regularly to give prompt feedback and guidance.

Netflix seems to have embraced this aspect of agile performance review more quickly than expected. Its CEO has stopped formal reviews, as they appeared to be ritualistic and too inconsistent to make any substantial changes. They also eliminated KPI’s, so there are no established ways of measuring performance for employees. Instead, managers and employees focus more on their abilities to think outside the box and to put in their best, which is way better than achieving set goals and calling it a year. 

 

3. The need to foster employee growth 

Agile performance review encourages flexibility. Managers can fully embrace the idea that employees could be different in all ramifications and treat them accordingly. As adopted in GE, managers are not allowed to wait until the following annual review to mention that a team member’s actions are against the company’s goals. Instead, both parties are driven to make day-to-day improvements for better performance all-round the company.

Employees at IBM have also found this new approach more appealing, as they now get frequent real-time feedback. These employees prefer having even more feedback as it encourages them to make necessary adjustments to their performance. Quick adjustments mean higher productivity and better performance for each employee.

 

4. The need to blend in with the unique work approach of Gen Z-ers

Gen-Zers are now the new workforce. And the new generations need a new approach to work and performance evaluation. These employees are big on frequent communication, constructive feedback, and the utilization of technology – all these make agile practice the compatible review structure for the modern workforce.  

At Deloitte US, they realized that the Gen Z-ers are taking up more job positions at their company: more rapidly than expected. This prompted their switch to the agile performance review system. Ongoing feedback helps low-performing employees catch up with the work pace of high performers, as they get to make adjustments and improvements right on time. 

On the other hand, the lack of constant feedback in the traditional review system leaves them far behind, making it even more challenging to catch up in a fast-paced work environment.

Gen Z
Organizations must blend in with the unique work approach of Gen Z-ers

5. The changing demands of a talent-dense workforce

The dynamic between employers and employees have changed. Now employees question the company to see if they should stay here to grow their career. In order to retain talents, managers switch to agile performance reviews because of its ability to create a flat hierarchical structure.

Understanding the desire of high-performing employees, Kelly Services US has adopted the agile performance review system that promotes creativity and innovation. This performance management system helps them leverage the competitive advantage of hiring and developing highly talented employees to improve company growth rather than buying their loyalty. 

 

It is time to make that change

The benefits of the agile approach outweigh its downside, and so far we haven’t seen any reason why this is a bad approach to effective performance management. 

As a matter of fact, the agile performance review system instils continous development in employees. It prompts them to improve constantly, while the traditional practice only drives them to hit certain targets. 

If you want a company filled with risk-takers who desire to exceed expectations, the agile performance review is the right approach to adopt.

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Thao Nguyen Le

Thao Nguyen Le, GroveHR

Nguyen is an Associate Marketing Manager at Grove HR – an emerging HR solution for SMBs. She is an ESFP who loves vibrant experiences, engaging in life eagerly, and taking pleasure in discovering the unknown.