Companies are increasingly ditching annual appraisals for ongoing feedback models. Clear Review’s CEO, Stuart Hearn, explains how his company’s continuous performance management software provides a user-friendly way to boost employee engagement and increase productivity.
Tell us a little bit about the concept of continuous performance management – where did it spring from, and when did it start to become popular?
Stuart Hearn: It was first recognised in 2012 when Adobe publicised its decision to drop annual appraisals and ratings in favour of having regular, developmental ‘check-ins’ combined with continuous feedback. Following that, some of the largest companies in the world followed suit, including Microsoft, GE, Deloitte and Accenture. This led to a domino effect, and it’s now the standard in performance management.
What sets Clear Review apart from rival performance management systems?
One word: simplicity. Clear Review is the simplest performance management system in the world. Every time people see Clear Review for the first time, they are amazed at how easy it is to use compared with other systems they have seen or used. This is essential; the focus of continuous performance management is on having regular, meaningful discussions, so the software must be very ‘light-touch’ in order to support, rather than detract from, these conversations.
Clear Review’s customers also love that it gives managers and employees a framework for effective performance conversations and feedback. It provides best-practice prompts for discussion, has a quick and easy way of giving useful real-time feedback and includes short videos on key performance management skills.
What are the most improved areas of workforce performance Clear Review has seen in the companies it has worked with that have moved from annual appraisals to a continuous approach?
When you get performance management right and make it an ongoing process, employees become more engaged in their work, and this is evidenced by tangible increases in employee engagement scores.
This is hugely important; research from Gallup shows that organisations with strong employee engagement have 22% higher productivity, as well as significantly lower staff turnover and reduced absenteeism. All of this has an impact on the bottom line.
Clear Review’s customers also tell us that their employees are setting higher-quality objectives that are more aligned to the organisation’s overall goals. This is resulting in more effective delivery of priorities and projects.
How important are Clear Review’s customers in helping it to continually improve its own performance management system?
Its customers are vital to the ongoing development of Clear Review and their ideas feed directly into the product’s roadmap. The process is managed by a dedicated customer success function that speaks to customers every day and gathers suggestions posted on an online customer forum. As a result, some fantastic developments are planned for 2018.
How do think the continuous performance market will grow within the HR sector over the next five years?
The growth is going to be huge, as we’re just moving from ‘early adopter’ to ‘early majority’ stage. According to the latest Deloitte Global Human Capital Trends survey, 79% of executives rate the redesign of their performance management as a high priority.
This was borne out at the recent CIPD Performance Management Conference in London, where every organisation presenting had successfully moved to continuous performance management in some form. Most of the attendees that Clear Review spoke to said they were there specifically to learn how to move away from annual appraisals.
What are people’s main concerns about replacing annual appraisals?
Clear Review speaks to a lot of organisations that want to change the way they approach appraisals, but are nervous about doing so. This is understandable, as performance management touches everyone in an organisation, so the cost of getting it wrong seems high. There is often concern about whether managers and employees will adopt a new approach.
However, in Clear Review’s experience of supporting numerous organisations to move to continuous performance management, the success rates are exceptionally high. If the change is supported by a good communication plan and purpose-built software like Clear Review, then most managers and employees will adopt the new processes. Clydesdale & Yorkshire Banking Group is a good example of this. In just the first ten weeks of launching continuous performance management, its staff had set 50,000 goals, given 17,000 pieces of feedback and had 2,000 check-in conversations.