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Grasshopper is everywhere

Original Article

Yearly Reviews? Try Weekly

The status-update era is changing the annual performance review.

With many younger workers used to instant feedback—from text messages to Facebook and Twitter updates—annual reviews seem too few and far between. So companies are adopting quarterly, weekly or even daily feedback sessions.

Not surprisingly, Facebook Inc. exemplifies the trend. The social network’s 2,000 employees are encouraged to solicit and give small nuggets of feedback regularly, after meetings, presentations and projects. “You don’t have to schedule time with someone. It’s a 45-second conversation—‘How did that go? What could be done better?” says Lori Goler, the Palo Alto, Calif., social-networking company’s vice president of human resources. More formal reviews happen twice a year.

For most companies, employee reviews are still an annual rite of passage. Some 51% of companies conduct formal performance reviews annually, while 41% of firms do semi-annual appraisals, according to a 2011 survey of 500 companies by the Corporate Executive Board Co., a research and advisory firm.

And increasing frequency may not make much of a difference if the performance appraisals are ineffective to begin with, say some. One academic review of more than 600 employee-feedback studies found that two-thirds of appraisals had zero or even negative effects on employee performance after the feedback was given. “Why is doing something stupid more often better than doing something stupid once a year?” asks Samuel A. Culbert, a professor at the Anderson School of Management at the University of California, Los Angeles and the co-author of the book “Get Rid of the Performance Review!”

Some firms have found that the traditional once-a-year review is so flooded with information—appraising past performance, setting future goals, discussing pay—that workers have trouble absorbing it all, and instead dwell on criticism without really hearing constructive ways they can improve.

When Grasshopper LLC, was founded in 2003, the company conducted annual reviews. “We very quickly realized that it was impossible and foolish to sum up an entire year of someone’s work in one meeting,” says David Hauser, Grasshopper’s co-founder and chief technology officer. The Needham, Mass., company, which provides virtual phone systems, then moved to quarterly reviews, but found that employees would spend anywhere from four to eight hours at the end of each quarter preparing and writing their reviews, which seemed like a waste of time.

Now, every two weeks, managers and employees of the 50-person company meet one-on-one for 30 to 40 minutes to discuss issues big (“I want new job responsibilities”) or small (“Can I move my desk?”). They also discuss performance during the previous two weeks and set goals for the next period.

“Instead of these big scary meetings, there are frequent meetings with much less pressure,” says Mr. Hauser. Mistakes have been caught more quickly and tensions have decreased between employees and managers, he says.

The downside is that the biweekly meetings are time-intensive for managers, but Mr. Hauser says that being in regular communication with reports is part of a manager’s job.

Mike Morris, Grasshopper’s vice president of customer acquisition and retention, says he blocks out every other Wednesday afternoon to hold feedback meetings with his six direct reports.

At first, he says, employees were worried that the biweekly meetings would be punitive, but he stresses that they are really about providing feedback and setting goals. “I do think it took a little bit of adjustment,” says Mr. Morris. “There really isn’t anything in those discussions that comes out of left field. As a manager, I’ve tried hard to make sure that it becomes much more of a regular conversation, as opposed to a scary review.”

New software programs are also making it easier for workers and their managers to share instant praise and criticism.

Facebook uses Rypple, a program that resembles the social-networking site and allows workers to give each other real-time feedback (“stop interrupting customers” or “great presentation at the last meeting”). Users can “like” co-workers’ activities, solicit reactions to their work or reward colleagues with virtual “badges,” says Daniel Debow, co-CEO of Rypple, a Toronto-based firm. Twice a year, Facebook managers pull summaries of the feedback to discuss performance, pay and promotions, says Ms. Goler.

Some managers, though, think that even the annual review is too much. Paul Purcell, chairman, president and chief executive of Robert W. Baird & Co., a Milwaukee financial-services firm, says that for his 12 direct reports, he does formal reviews every two years. Most of the company does reviews annually. Doing reviews more often is “redundant,” he says. “You’re spending too much time filling out paperwork.”