The motivations for employees to work hard are:

• To get manager's appreciation for a good job done,
• Get timely feedback on areas of improvement,
• To get rewarded financially for the contributions made and to have a good career growth.

This is a reasonable expectation from an employee as:

1) The need for human beings to get appreciated by others is innate in their nature as social beings.

2) The aspiration to grow financially is there for everyone.

3) Beyond the basic needs that can be met financially, employees also look for higher level needs such as challenges, more responsibilities and a sense of contributing to something that is bigger than themselves.

Traditional performance reviews:

Performance reviews are usually done at the end of the year in organizations to assess how employees have performed through-out the year and to give them an increment and promotion based on that. But often times, the performance review activity turns a nightmare for employees, managers and HR. The following are some of the problems faced by each of the affected stakeholders:

Manager

1) It is difficult to remember the contributions made by the employee through-out the year, and so the manager instead focuses on the past few months or few weeks of performance which is fresh in the memory.

2) Instead of doing an objective review, managers consider these reviews as an annual ritual and try to complete it without giving enough attention.

Employee

1) Employee feels his manager is too judgmental. No proper evidence is given to validate a rating.

2) Manager might overlook all the positive contributions and instead the focus might get more on negatives.

3) In today's organizations, there is a lot of collaboration and lateral dependencies on people and their performance. So, even a 360 Degree feedback done once a year is not adequate.

These practices of ineffective Performance management effect the growth and efficiency of the employee as well as the Organization.

The new Solution to achieve effective performance management: Periodic Reviews and Continuous Feedback

The above mentioned difficulties can be over taken by introducing a system of bottom-up and periodic review plans (Structured but initiated by Managers and Employees), continuous / any time feedback and social rewards and recognition programs.

Continuous feedback allows employees to get feedback year long not just from managers but also from their teams, skip level managers, internal customers, external customers and other relevant people whom they work with.

Advantages of having Effective Performance Management:

1) Feedback given then and there helps employees to understand how they are performing. While positive feedback gives them a sense of accomplishment, they can still look at negative feedback with a clear mind when the evidence is fresh in their mind so that they can take corrective actions.

2) Since multiple people share their feedback, it is more validated and moderated, benefiting both managers and employees.

3) The year end reviews would be easy on everyone, as the expectations and feedback have been communicated in both directions round the year and there will be no surprises!

4) The organization can also experiment with rewards and recognition programs that are peer reviewed and link these to financial rewards at the end of the year.

Gartner recommends that organizations should balance their top-down traditional performance reviews and pay-for-performance programs with bottom-up, social recognition and rewards. So the right mix of continuous feedback and rewards, employee specific reviews and the formal annual reviews will make performance management more effective, resulting in better engagement, motivation and development of employees.

About the Author: Kavitha Kalyanasundaram is the Implementation Manager at Synergita.