Eric Mosley, author of the Crowdsourced Performance Review, offers a revolutionary option for employee reviews.  Meet him at SHRM or attend his session: The Crowdsourced Performance Review: The New Social Era in HR?

The traditional performance review is frozen in time (about 1970, in fact).  Its design is outdated – “rate employee’s innovation skills from 1 to 5” – and its implementation is typically mediocre. Unless you fix it, your company itself will perform (as the review itself might say) “below expectations.”

The most destructive flaw in a traditional performance review is its single point of failure, which is the manager’s skill at judging performance and communicating ways to improve performance. Even a painstaking performance review format can do more harm than good in the hands of an unskillful manager. It’s simply impossible for a single manager to observe the day-in-day-out performance of every team member.  This forces many managers to rely on blunt performance measurements like “average call waiting time” or “number of units produced per hour.”

In today’s global economy, there’s no room for such an antiquated system. How can leaders measure the valuable qualities of a modern work group, including creativity, innovation, problem solving, and teamwork? If your workplace lacks creative spirit, how can you measure the non-existent revenue or cost containment that creative problem-solving would otherwise produce?

The solution is to spread responsibility for performance reviews among every member of an organization through crowdsourced feedback and recognition (via a system of social recognition). This means that everyone is responsible for noticing, recognizing and commenting on positive work behavior on an easy-to-use system (similar to social networking but confined within company walls). Ultimately, this system informs the manager in detail about individual performance, and the manager adds this rich collection of stories to traditional performance measures like those mentioned above to make a final performance assessment.

Here are five ways crowdsourcing performance reviews can fix the traditional review system:

  1. The crowd often knows more than the manager. In his bestselling book The Wisdom of Crowds, James Suroweicki described 150 years of experimental evidence that the judgments of many people, taken together, are more accurate than the judgment of any single member of a group. Today this principle is the foundation of “star rating” on online shopping sites like Amazon.com and iTunes. In performance reviews, the average assessment of many people with whom an employee works will often be more accurate than the assessment of the manager – in effect, everyone whom the employee touches can share the positive achievements/value of that employee’s performance on a yearly, weekly or daily basis.
  2. The crowd makes more objective judgments than the manager. Managers are fallible humans; their judgment can be swayed by intangible factors, preferences and outright prejudice. This is true for an employee’s crowd of peers as individuals, but the judgment of many has been proven again and again to be more objective. Performance reviews must above all be seen as fair and equitable; employees will then take their recommendations to heart.
  3. The crowd can do more than the manager. In a social recognition system, the crowd can make dozens, even hundreds, of observations about each employee’s behavior over time. This is simply impossible for a manager (who by the way, has other things to do!). By distributing the task of recording performance, the system creates a rich performance narrative for every employee.
  4. Crowdsourcing creates a performance narrative of the individual. In principle 3 of The Crowdsourced Performance Review, I used the term “performance narrative,” because crowdsourced performance reviews consist of more than star rankings. Each record of social recognition includes a narrative – what the employee did, what behaviors or talents she demonstrated, and the positive result for the team, department, customer or company at large. Aggregating the record gives the manager an employee a set of work stories to discuss at review time. Traditional performance has rightly emphasized concrete stories of accomplishment to illustrate and legitimize the manager’s assessment of performance.
  5. Crowdsourcing creates a social graph of the organization. For executives, the most exciting outcome of crowdsourcing performance reviews is the aggregate data from hundreds or thousands of social recognition records. Using today’s principles of big data analysis, crowdsourcing can show the full ebb and flow of an organization’s behavior. To name just a few previously difficult tasks, executives can use the data to:
  • Identify particularly gifted managers and potential managers early in their careers
  • Locate pockets of creativity and innovation
  • Target misalignment between manager and group
  • Seek out “hidden influencers” by identifying those with strong social ties outside the standard organization chart
  • Identify outperforming and underperforming individuals and groups early
  • Direct resources and compensation to the most effective, well functioning teams in the company.

Combining the wisdom of crowds, the human need for social interaction, and the power of big data analysis, the crowdsourced performance review can bring the performance review process forward from its current ineffective state to take its place beside the best Human Resources has to offer today.