3 Steps for Implementing a Peer Review System to Replace Your Annual Performance Review

Cartoon business man climbing 3 steps to success in a performance review

Is the annual performance review dead? If not completely gone, this old-fashioned system, universally acknowledged as painful, seems to be on its way out at many companies like Adobe, Deloitte, Gap, Accenture and even GE.

Once upon a time annual performance reviews served the purpose of giving employer and employee an opportunity to talk one-on-one and take a measure of performance. But we’ve come a long way since then. Global competition has forced employers to “up” the game…they can no longer wait a full year to boost performance and then slowly feel the results. And employees, if they are not engaged fully in their job and recognized for their contribution, are apt to jump ship and go where their talent will be appreciated.  In addition, we have learned a lot more about what it takes to improve individual and team performance.

So what’s the answer? Many companies are adopting a peer review system. Done right, the advantages are many:

  • the feedback is as close to real-time as possible
  • positive behavior is immediately recognized
  • managers have more information on the strengths of their teams
  • employees have a better picture of how they are doing and where they stand

The key words are “done right.” Many peer review plans have not panned out and are fraught with defects. But if you follow these three steps, you have a better chance to be among those who rave about the system and rejoice that the annual performance review that used to plague us has been abandoned.

  1. Include key stakeholders in the design and make it easy and engaging.
    Work with your managers to explain the benefits and your goals. You will need the active and enthusiastic support of leadership to pull this off. Everyone from the C-level on down should participate. And they will, once they understand how the program aligns with creating a high performance culture by recognizing and celebrating positive behaviors that matter most.Take advantage of the social media technology that is at everyone’s finger tips. Use a program that is simple to use and interactive. The more complex the interface, the less participation. You want any employee to be able to salute a peer without having to work through multiple steps. For recognition to be swift, the means of spreading the praise needs to be accessible, uncomplicated and user-friendly.
  2. Link the behaviors that you want recognized to the core company values.
    For improved performance to be meaningful, it should have a clear connection to what the company stands for as well as real business results. If, for instance, a key value is collaboration, there should be a category of recognition that emphasizes teamwork. So if an employee observes a situation where a peer works effectively with a team mate to solve a long-standing problem, this should be publicly recognized as an “Atta-boy” on the system.
  3. The feedback should be frequent, timely and earned.
    When positive feedback is given almost on the spot, the link between the behavior and the encouragement is strong and it is more likely that the desired behavior will be repeated. This is why a peer review system works. But recognition should be earned. Undeserved praise can have a negative effect. Not only will the praise seem empty to the employee, but others will also be de-motivated observing that praise can be too easily earned. Many proponents of a peer review system follow the mantra of “praise publicly and criticize privately.”

What would work best for your unique organizational culture?

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