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The pros and cons of peer review

With the annual performance review criticised as unfit for purpose, peer reviews are becoming more popular as part of a wider shift to a continual feedback culture

The traditional yearly performance appraisal process has long been criticised for its slow feedback loop in an increasingly fast-moving working world. It fails, as well, because all too often the process ends up being a negotiation around promotion and pay, rather than a discussion about performance and development. Plus it is all too easy for bias to come in, with discussions typically by just one person, someone’s manager.

Yet the yearly review remains a core part of many companies’ performance management, in part because a better alternative is hard to find.

But with the coronavirus pandemic leading to large numbers of people working remotely, resulting in less daily interaction with managers, it has become increasingly important to introduce change and create a more democratic feedback process. 

The likes of Google and Netflix have already made moves in this direction, with the aim of understanding employees’ performance and behavioural attitude from the viewpoint of people they work with regularly, which might include colleagues, peers and other managers.

The role of line managers becomes one of aggregating and summarising this feedback – 50 or more inputs per employee a year – as part of an ongoing performance evaluation process, which is focused purely on personal and professional development.

So does this approach have legs beyond the world of Big Tech? Iain Thomson, director of incentive and recognition at employee and consumer engagement specialists Sodexo Engage, believes it does. While peer reviews have to date taken place predominantly at the management level in the form of 360-degree appraisals, there is a case to be made for introducing feedback more widely across all levels of the organisation.

“When done well, if you get broad feedback from different types of people, you can learn far more about yourself than you would from just manager-to-subordinate input,” says Thomson. “And from a manager’s viewpoint, it can help to give a more accurate picture of an employee’s performance, enabling you to identify patterns that indicate an issue you could manage and steer them through.” 

Evaluating the peer review process

Jason Lauritsen, people management adviser and author of Unlocking High Performance, likewise believes a well-designed peer review process can be beneficial.

“Peers who frequently work together have a much better vantage point to observe an individual’s true contributions and impact than their manager,” he points out. “They also feel the impact of performance or skills gaps more directly and better quality feedback, in theory, should lead to improved future performance.”

But there are downsides to this kind of approach too. A key challenge involves obtaining constructive feedback that is honest rather than polite, but is not so direct and personal it could damage relationships between colleagues. 

Neuroscience suggests the human brain responds to “social” threats in a similar way to physical ones. Lauritsen explains this means people tend to “react defensively to critical feedback”, particularly if they consider it unjust or a threat to their social status at work, a situation that can result in “lasting damage to our ability to trust one another and work effectively together in future”.

Another concern, according to Jo Taylor, managing director of human resources consultancy Let’s Talk Talent, is ensuring input is objective and fair, and that people do not end up being discriminated against, bullied or “harassed through feedback”, particularly in the case of a continual feedback culture.

A further consideration, meanwhile, is simply the time and effort it takes for managers to deal with high volumes of data coming in regularly from numerous sources.

“I don’t see how it could work unless you make it very app-driven and base it on tick boxes and smiley faces, but how much value does that kind of response offer?” posits Taylor. “So it’s about going back to basics, understanding what the end-game is and asking for feedback on that basis. Is it about being honest and transparent, is it about engagement and motivation? What’s the question?”

How to get the process right

Karen Plum, director of research and development at consultancy Advanced Workplace Associates, says: “It all comes back to objectives and vision, so what’s the aim behind doing it or is it simply putting lipstick on a pig?” she asks. “There’s not much point if you haven’t the right culture and management practices in the first place to help people grow and develop.”

Just what such an environment might look like, Nathalie Cousseau, HR director at IT consultancy Avanade, believes it is one based on “trust, honesty and openness”, a scenario that for most employers “takes time to embed”. 

In this context, providing both managers and employees with training on how to give and receive feedback using a constructive, development-focused approach can help. But Cousseau also advises against swamping people with “feedback-itus”. 

“There’s no point asking everyone for feedback on every single interaction as it just builds fatigue, so it’s important to identify those moments where it’ll be of benefit, for example after a presentation or a project has been completed,” she says. “It’s not a numbers game; it’s about obtaining feedback at the right time for learning and growth.”

Lauritsen agrees. While he expects ongoing performance conversations to increasingly become the norm, he does not anticipate formal peer review processes, socially based or otherwise, to become common practice. Instead he predicts there will be a continued focus among employers on “fostering more frequent peer-to-peer feedback, particularly feedback and recognition”. 

“It will be about posting positive accolades to the company’s recognition platform or participating in a structured debrief at the end of a project,” says Lauritsen. “So it will be peer feedback in the flow of work rather than as a formal process.”

Case study: Avanade

By decoupling learning and development conversations from pay and progression decisions, and shifting to a continual feedback approach that includes peers, Avanade has revamped its performance management approach.

The IT consultancy started its Forward Together programme some 18 months ago, with the aim of shifting the power and responsibility for personal career development from managers to employees. 

Nathalie Cousseau, human resources director, explains: “To be a true growth organisation and for people to effectively develop their careers, feedback has to take place on a just-in-time, ongoing basis rather than as an annual review. So the aim is to foster the kind of environment where it feels safe for real-time feedback to happen as it’s being done with the right intentions.”

As a result, development meetings are now expected to take place at least once a quarter, while employees are encouraged to request peer feedback at key moments, such as the end of a project or after giving a presentation. 

To make this process easier, the organisation has created a plug-in to Microsoft Outlook, which enables them to email designated colleagues a choice of template-based feedback forms. It is then up to the employee if they wish to discuss this feedback with their manager or not.

As Cousseau says: “The aim is to allow individuals and the people writing feedback to give and receive it in a way that is truly developmental by removing the worry about how it might ultimately be used by managers.”

Managers themselves, meanwhile, are also encouraged to solicit feedback on the performance of team members before holding reviews to obtain a more rounded view of their strengths and possible areas for development. 

“To be a true growth organisation with a development focus, you have to create the right environment to give and receive feedback, so you can adjust and learn and continue to improve. It’s part of a cultural shift and it takes time, but it is worth it,” Cousseau concludes.