Serena has 10 direct reports to evaluate, and she is finding it difficult. Her team faces ever-faster project cycles and the people best able to adapt at speed — the employees she values most and wants to incentivize — aren’t scoring well on the company’s ratings for specific job goals and behaviors. Serena’s problem is common in today’s complex business environment, where the demands on employees evolve rapidly and employees add value to each other’s work.
Some organizations might consider scrapping performance ratings altogether in today’s changing workplace, but that would likely undermine employee performance. Instead, companies can bolster performance management in three ways: Provide ongoing, not episodic, performance feedback; make performance reviews forward-looking, not backward-looking; and include peer, not just manager, feedback in evaluating performance.
High-quality peer input has become an essential part of effective performance feedback
Of those three tactics, research by Gartner shows peer feedback can have a particularly strong impact, boosting employee performance by as much as 14%.
“As work becomes more interdependent and managers have less direct visibility into the day-to-day of their teams, high-quality peer input has become an essential part of effective performance feedback,” says Jessica Knight, research director at Gartner.
Evaluate network relationships
To improve the quality and accuracy of peer feedback, managers should identify sources of feedback based on who has knowledge of an employee’s work, rather than the employee’s formal relationships. The possible sources of 360-degree feedback include these peers:
- Enablers who have the same roles/skills as the employee and work on the same projects as the employee
- Coaches who have similar roles/skills as the employee but work on different projects
- Collaborators who make different contributions to the same projects as the employee
- Mentors who have different roles/skills from the employee and work on different projects
One global professional services company asks its employees to recognize the contribution colleagues have made to their success through a point system, rather than evaluating their cognitive behaviors. For example, of 10 points, an employee might assign 1 point to a peer who provided encouragement during a challenging project but 4 points to a colleague who introduced a solid prospect based on their understanding of the business.
It is important to set the tone for open and honest conversations
A material science company asks employees to rank peers based on the impact and effectiveness of their contributions, and whether the peer’s behavior aligns with enterprise values when make a contribution. Employees make qualitative comments to justify their rankings. For example, one peer might get a 1 for streamlining an existing process or cutting costs, but a 3 for pioneering a new approach to solving a strategic challenge.