As performance reviews fade, companies devise alternatives

PITTSBURGH – Feedback done well can stitch an organization together. Yet few companies do it well.

That might explain why more than four-fifths of firms are ditching standard year-end performance reviews and ratings, including Goldman Sachs and General Electric.

Instead, many firms opt for a different take on the process. GE, for example, has begun using a mobile app.

So how do employees and their bosses give and receive feedback that neither party takes too personally?

A quality feedback process hinges on trust and setting expectations. And several companies said real-time, specific and face-to-face feedback is most effective.

"Companies that manage employees well don't leave (feedback processes) to chance," said Robert Atkin, a clinical professor of management at the University of Pittsburgh's Katz School of Business. "They'll talk and say, 'Hey guys, what do you do think about this?' "

At Summa, "ataboys," is one of the Pittsburgh software firm's most common forms of informal feedback. The simple phrase acknowledges a job done well.

A couple of years ago, Summa migrated to an in-the-moment feedback process or "agile performance management." Saying "great job" is not enough, said Coy. Point out specifics. Describe steps they can take to do better.

"What did I do that really made a difference? Being specific is more helpful to an employee. That's where a lot of people fall short."

If feedback is given weeks, months or even years afterward, it's out of context. That's one reason GE took to a mobile app, where employees and managers can log in and give feedback at any time.

But while the app allows for real-time feedback, it can kill face-to-face interaction.

Employees felt the quality of reviews suffered because bosses struggle to explain performance and provide steps for improvement, according to a survey of more than 9,000 employees by Virginia-based advisory firm CEB. Gallup research published last year found 63 percent of employees said their bosses don't recognize their achievements.

Then, instead of explaining what they did wrong, Ruben describes the results of one's behavior. If somebody's late, for instance, he explains the consequence of the lateness, detailing how it makes him feel disrespected — as opposed to barking, "Don't be late!"

"Feel" is a keyword in the Pittsburgh-based company's feedback process. "If you use the word feel, people cannot have an opinion of right or wrong," he said.

As CEO, Ruben said he rarely gets feedback. When he does, he cherishes it. Sometimes he will ask, "How do you find this meeting? Is my behavior all right?"

In similar efforts to better relate to those he manages, Ruben keeps an open-door policy. Employees at any level in the organization can speak with him. He often works in an open desk in the office floor rather than in his private office. At lunch, he plays soccer with the manufacturing employees.