The annual performance review is out of sync with markets that change overnight and company goals that evolve every quarter. GE is currently one of the largest companies trying to modernize their annual reviews to maximize employee motivation and align their goals with FastWorks, the company’s initiative for lean and nimble workflow.
How to Modernize the Performance Review
- Create a platform for continual assessment. GE managers and employees check in throughout the year, and use a mobile app to provide each other praise and constructive messages. Thanks to the frequent and continuous feedback from bosses and peers throughout the year, employees learn faster and shift gears quicker if they receive negative feedback.
- Reward progress, not just being right. Following their initiative to create room for innovation in the company, GE rewards employees for asking questions and learning rather than simply rewarding them for being right. This allows employees to test ideas, take risks, and learn from trial and error rather than being fixated about being right all the time.
- Give rewards throughout the year. Instead of providing one big reward once a year, GE is testing the option to reward people throughout the year with incentives such as raises, promotions, and time off. GE believes that this will still reward high performers, but also provides greater incentive for employees who fall in the middle of the spectrum to perform at their best all-year-round.
- Meet for a brief annual summary. In addition to frequent check-ins, managers are encouraged to meet with employees for an annual summary to talk about the feedback they have received throughout the year. Managers and employees can reflect on their performance and progress throughout the year without the pressure and paperwork of a formal performance review.
- Don’t limit employees to a label. Instead of rating employees in five categories ranging from “role model” to “unsatisfactory,” GE managers use the information to look at the bigger picture and evaluate the employee on different capacities such as customer service, problem-solving skills, and improvement throughout the year. This allows both the manager and the employee look at different strengths and places for growth.
Takeaway: If you’re looking to revamp your annual performance reviews, try following GE’s model. Provide employees with continuous feedback and reward learning processes and progress to foster adaptability and innovation.