Watch CBSN Live

How 'crowdsourcing' can improve employee reviews

(MoneyWatch) The other day I recommended that you modernize your organization's performance management system by stepping up to a socially savvy, Web-based, integrated product like Rypple. So I was especially interested to run across a parallel recommendation in the Harvard Business Review: Stop traditional one-on-one reviews and "crowdsource" them instead.

That may sound crazy. But consider that 45 percent of HR leaders don't believe that employees' annual performance reviews don't accurately reflect the quality of their work, according to Globoforce and SHRM's Winter 2012 Report: The Impact of Recognition On Employee Engagement and ROI [PDF]. In other words, nearly half of all corporate HR departments have no confidence in the systems their companies use to track and measure worker performance.

The core problem is that today, more than ever, direct managers are typically weak links in the review process and aren't adequately tapped into the diverse, cross-organizational responsibilities of individual contributors. But if managers lack insight into what employees really do, who does have it?

Their peers.

That's where drawing on an employee's coworkers, or even a company's broader workforce, in evaluating the person starts to make sense. Indeed, aggregating feedback from across the organization could well be a smarter, more effective way to measure and reward performance. HBR recommends a number of ways that crowdsourcing can help improve the performance review system. Here are three:

Capture feedback continuously. With the right systems in place, peer feedback can be collected continuously throughout the year, not just once or twice annually. That gives employees far more opportunity to get constructive feedback and improve their performance.

Widen the circle. Managers no longer need to rely solely on their own limited insight into employee performance; they can leverage a dispersed "cloud" of feedback systems everywhere employees work and collaborate.

Feedback is genuine. Peers give feedback when they recognize great performance, which often makes their observations more relevant, honest, and useful than the structured notes of a manager who has a semi-annual requirement to write a review.

Photo courtesy of Flickr user Sreejith K