Maybe your employees are already giving each other feedback on an informal basis, maybe they’re not. In the past, feedback outside of performance reviews was often seen as a nice to have. Today, however, HR departments are putting their focus on infusing regular feedback into official management processes. Here are three reasons why:
1. Cut time and save money
Management research firm CEB found that the average manager spends over 200 hours on annual performance reviews. However, nine in ten managers are unhappy with the way their company conducts its reviews. Together faulty performance appraisals cost a company of 10,000 about $35 million per year. Meanwhile, continuous feedback can cut review time from 2 months down to 2 weeks.
2. Business agility
If managers, employees and peers are only discussing performance annually, everyone misses out on the opportunity to grow and develop throughout the year. This is a particular concern for companies today. Deloitte found that professional skills now have an average life of only 2 1⁄2 to 5 years, meaning employees must constantly be learning to keep up with new trends. Having a workforce with the ability to learn and adapt to industry changes is the most valuable asset a competitive company can have.
3. Enhanced HR data & metrics
HR is currently undergoing a much needed revamp. People are not only tired of outdated performance review processes, 77% of HR managers don’t feel the information yielded from annual reviews accurately reflects employee contributions. It’s not only performance reviews that need a reboot. The changing face of the workforce means that HR has to play a more strategic role in talent acquisition and retention. With a growing demand for highly skilled employees, and a tendency for millennials to jump from job to job, companies must now compete with others in what they have to offer. With performance data on their side, HR departments are meeting these demands with more accurate ways of measuring and gathering insights into the needs of the millennial workforce.
For more info download our white paper on the benefits of real-time feedback.
This article is part of a guide for HR about how to create a feedback culture.
HR Manager Handbook: Setting-up a feedback culture