Performance reviews are starting to evolve. The time-honored tradition of annually evaluating your employees in terms of productivity, improvement and goal achievement remains a touchstone for millions of businesses, but the way they’re adopting and executing these evaluations is being reformed, thanks to new trends and technologies dictating the new standard.

So how are performance reviews changing, and what should you be doing about it?

Why You Should Care About Performance Review Trends

If your business doesn’t currently offer a standard performance review, or if you feel satisfied with the process you already have, you may wonder why you should care about these developments.

But consider this:

• Performance reviews have a purpose. According to Emplo, the modern performance review “plays an integral role in the open line of communication between manager and employee, between feedback and silence. It is the chance to offer employees the acknowledgment that they’re looking for, to encourage them to strive for high levels of achievement, and to nip problems in the bud before they grow into thorny roses.”
• Tech makes things easier and cheaper. Technology makes almost everything easier, faster and less expensive; so why would performance reviews be any different? Incorporating the latest tech can make the process go smoother and cost less time and money.
• Employees expect modernity. If you don’t adopt the new standards for performance reviews, one of your competitors will. And because employees expect their employers to offer competitive performance reviews and benefits, you may appear inferior because of it.

Rejection of the Traditional Model

According to research by Kansas State University, Eastern Kentucky University and Texas A&M University, pretty much everyone hates to receive negative feedback in the traditional context. Earning a numerical rating in each of several categories at the end of a performance period tends to fill people with resentment and frustration.

On top of that, most supervisors hate filling out the same, tired, formulaic templates for all their employee reviews. They see it as a waste of time, and are eager for a new model that allows them to do the work faster, and in a way that actually appeals to employees.

Project Management Software

Project management software platforms, once relegated to managing and organizing tasks, are now evolving to incorporate more metrics and insights to assist with employee evaluation. For example, Taskworld explains its new feature like this: “Whenever a task is completed, the assigner will have an option to give feedback to its assignees. This ensures that the receiver understands the context of the feedback. It also encourages your team members to give frequent feedback to each other.”

In addition, project management software gives supervisors a transparent, automated tool to evaluate individual employee performance, answering questions like “how many tasks has this person completed?” and “how does this person interact with others?”

Millennial Demands and Oversight

Millennials are also having an effect on how performance reviews are done. As employees, millennials crave feedback more than any other generation. They want their work to be acknowledged, and want to hear how they’re doing, so they can learn, adjust appropriately and continue advancing. This makes them feel more engaged with their work, so if they aren’t able to get it at one company, they may leave for a different opportunity.

Of course, these days, millennials are starting to step into more supervisory and managerial positions. So rather than asking their bosses for more performance reviews, they’re taking their pro-feedback stances and are using them to develop more intricate, engaging reviews for their subordinates.

Real-Time Feedback

Modern technology also affords supervisors ample opportunities to give real-time feedback to their employees. Rather than waiting until the end of the year, or even the end of a project, a quick chat over instant messenger or a concise email thread may be enough to proactively recognize a problem area and suggest a course to correct it. This agile mode of feedback allows for faster changes and more satisfied, informed employees throughout each project.

Is your business ready to keep pace with all these changes? You don’t need to mimic the approach of a different company, but you should at least learn from the new standards and expectations that are starting to develop, and revise your strategy accordingly. Better performance reviews can lead to higher morale, higher efficiency and overall, a better company in which to work.

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This article, “Performance Review Smackdown: Why Traditional Employee Feedback Just Won’t Work Anymore” was first published on Small Business Trends