Apps

Can the Annual Review Be Replaced By an App?

More companies are turning to apps that offer real-time feedback from bosses, peers and subordinates alike. But do they work?
Can the Annual Review Be Replaced By an App?
Image credit: Viktor Koen
Magazine Contributor
7 min read

This story appears in the May 2018 issue of Entrepreneur. Subscribe »

There are few workplace institutions so widely reviled as the annual performance review. Managers dread them because they’re time-­consuming to prepare and nerve-racking to deliver. Employees see the review process as upsetting and outdated. In a recent study conducted by the software company Adobe, 59 percent of office workers said reviews had no impact on the way they approached their work, and 37 percent said they had reacted to a review by looking for a new job

Related: The 10 Golden Rules of Effective Management

When it comes to providing companies with solid appraisals of their people, performance reviews disappoint there, too. The management research firm CEB Global reports that nearly nine in 10 human resources leaders don’t think annual performance reviews yield accurate information. It’s no wonder that leading companies like GE, Accenture, IBM, Adobe and Gap have all made headlines in recent years for abandoning the annual appraisal process altogether.  

And yet, many experts believe that the key to productive, happy employees is giving more feedback, not less -- especially to younger workers, who are thirstier than previous generations for coaching and opportunities for professional growth. 

Eager to find a better way, companies from Warby Parker to Comcast to Birchbox have begun to enlist apps, like Impraise, 15Five, Reflektive, Zugata and Lattice, which are built to provide employees with continuous 360-degree performance feedback and goal management: like a fitness tracker, but for your job. The promise is to make employees more engaged and productive, while liberating managers from tedious paperwork and everyone from the dreaded annual assessment.

Reflektive, which recently raised $60 million in Series C funding, provides companies with a platform for employees to send encouraging, real-time feedback on things that a peer or subordinate is doing well (“You nailed that meeting, Jane!”) or jot down notes on a performance issue that should be discussed later in person (“Encourage Jane to speak up more in meetings”). It also offers “shout outs” -- public expressions of praise for a job well done -- which appear on a social media-style newsfeed, and tools to record employee goals and track their progress. So if Jane is working on increasing widget sales by 10 percent, a bar chart will quantify her progress toward that goal.

Related: 7 Ways to Manage Your Most Motivated and Talented Employees

Such relentless assessment may sound crazy-making, but Rajeev Behera, the CEO of Reflektive, argues that millennials, who now make up the largest demographic segment of the workforce, are simply hardwired for receiving digital feedback in their personal lives and expect the same in their professional ones. “If you grew up with Instagram and Facebook and you don’t get feedback -- a ‘like’ -- you get worried,” Behera says. “Millennials actually view a shortage of feedback as a negative signal.”

The catering to hyperconnected millennials doesn’t end there. Many of these apps are designed with principles from gaming and social media in mind. Before he founded Reflektive, Behera worked in mobile game development at Disney, and he brought some of those mechanics into his design for the app. For instance, when Reflektive launches with a new company, it often lets employees use the tool at first solely for getting and giving “shout outs,” in order to build positive sentiment about the product. “The first user experience of any product has to be really positive,” he says. “It has to leave you emotionally satisfied.”

15Five, a Reflektive competitor, also takes a page from social media. Its “high five” function -- akin to the “shout out” -- includes circular photos similar to Instagram profiles, as well as tagging and @mention functionality. And the app includes the ability to “like,” “heart” and leave comments on posts, à la Facebook. But for all the social media tricks in evidence, 15Five’s CEO, David Hassell, insists that the main driver for employees to use the app remains the potential for professional advancement. “We have historically low unemployment levels, and if a company isn’t offering you growth, you’re looking for something new,” Hassell says. 

Performance management apps have been around only a few years, and how they stand to help or hurt corporate culture remains to be seen. Amy Wrzesniewski, a professor of organizational behavior at Yale’s School of Management, told me that the apps have one thing going for them: Real-time, specific feedback has been shown to be highly useful in helping people correct problematic behaviors, or reinforce positive ones.

However, Wrzesniewski cautions that there’s simply no substitute for giving feedback face-to-face, and it could be destructive, in the long run, to have a software platform take the place of verbal coaching. “I worry a bit about people leaving a meeting and typing into the app while they’re walking down the hall with a colleague that they’re typing into the app about,” she says. “In the long term, I think that’s likely to be detrimental to the ability to build a team, to build trust.”

David Mallon, vice president and analyst at large for Bersin, Deloitte Consulting, also notes that while frequent feedback is held up as a principle of good management, it’s possible to go overboard with a system that allows everyone -- peers, managers, subordinates -- to comment on one another’s behavior 24-7. “You raise the question of who has the valid perspective on the performance of an individual, and you have to be careful that feedback doesn’t lose its effectiveness because you’re creating a lot of noise,” Mallon says.

There is the question, too, of whether these apps introduce some of the same inefficiencies they pride themselves on removing. Having an entire staff continually entering feedback on one another can become a time-suck and a distraction. And in more strained, toxic or politicized workplaces, the potential for abuse is real. At companies like Netflix and Facebook, for instance, employees are expected to deliver open, candid verbal feedback to one another -- no app required.

Related: 3 Effective Ways to Manage Employee Burnout

Ironically, some companies are now using these apps not to generate helpful feedback in real time but to help them generate more data for…performance reviews. Reflektive, for one, provides a data entry backbone to structure more formal, in-person conversations, which means no more “winging it” in feedback chats or filling out performance review questionnaires in Google Docs.

Instacart, the grocery delivery startup, started using Reflektive in 2017 to share recognition in real time and to gather feedback. But it limits formal performance reviews based on that feedback to quarterly reports. “We care about having a sense of urgency. There’s a lot happening [here], and we don’t want to create these systems just to have systems,” says Michelle Suwannukul, Instacart’s director of culture and engagement. Subscription box service Birchbox, which uses Lattice for performance feedback, has limited itself to using the software for biannual performance reviews for much the same reason. When I asked Melissa Enbar, VP of people and culture, how Birchbox manages to deliver public recognition to employees without “shout outs,” “high fives” or “praises,” she told me they do it the old-­fashioned way: a round of applause in weekly meetings. It is, in a sense, a kind of in-­person performance review.

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