A Digital Feedback Cycle: The Key to Efficient Conversations Between Employees and Managers

A digital performance review cycle is an important tool for facilitating meaningful conversations between employees and managers. For example, it can be used to foster the development of employees and teams through a customized performance review cycle, or to support hybrid work arrangements. But what should you keep in mind when creating a digital performance review cycle? Here are some key considerations.  

Why a digital performance review cycle?

The performance review cycle encompasses all the times a manager talks with employees about their performance and development. Digitizing the performance review cycle using an online platform or tools is valuable for properly documenting these conversations and making them more meaningful. On the one hand, it serves as an easily accessible record of these discussions; on the other, it can function as a clear dashboard for tracking the development of employees and teams. As such, the digital performance review cycle is often used to create a more modern, customized performance review cycle or, for example, to support hybrid work (more flexible work arrangements at home and in the office).  

Workflows for All Components

A modern online tool like hrmforce makes this step forward possible. It functions as a single, comprehensive, and efficient solution for a modern performance review cycle and for facilitating individual and team development within organizations. A key consideration when creating the digital performance review cycle is setting up workflows for the various development cycles that organizations employ. From the daily to-do list (Bila) and a basic development cycle to development and annual reviews, as well as organizing and monitoring the entire annual cycle. That is why all these variations of the performance cycle are represented in hrmforce’s software for the digital performance cycle. They are explained in more detail later in this article.  

A modern performance review cycle is clearly essential

In addition to effectively, centrally, and easily documenting the discussions between employees and their managers, modernizing the content of the performance review cycle is often the reason for choosing a digital performance review cycle. Organizations want dialogue in the workplace to be more flexible, simpler, and more tailored to individual needs. It is also often necessary to modernize the performance review cycle. This is because the traditional approach costs a lot of time and money and often yields little benefit or is even counterproductive, as a seven-year study at VU University Amsterdam revealed as early as 2018. Researcher and HRM lecturer Kilian Wawoe therefore advocates for a more modern approach with a greater focus on development through continuous, motivational coaching. The assessment of these reviews-often referred to as “mandatory” and “judgmental” by employees, managers, and HR professionals-was downright shocking at the time. 90% of HR professionals found the reviews to be of insufficient quality. 95% of managers were dissatisfied with the review cycle, and 66% of employees even reported that such a review cycle caused their performance to decline. The modern performance review cycle was already scoring significantly better back then, and that will certainly be no less true in today’s tighter labor market. Employees appear to want continuous attention to their performance. A continuous dialogue fits this need and results in a massive increase (280%) in employee engagement. Team productivity also appears to rise significantly (26%) with a development-oriented performance cycle, while voluntary turnover and absenteeism due to illness, according to the study, decrease by 41% and 43%, respectively. These are truly remarkable and encouraging figures.  

Ongoing coaching

Another finding highlighted by the researcher is that teams at top-performing organizations all utilize ongoing coaching. Team members receive feedback throughout the year on how they’ve performed and how they can improve. This boosts employee performance and satisfaction while reducing the risk of stress and burnout. “The best teams are never evaluated using a detailed rating scale, but at most with ‘suitable’ and ‘unsuitable.’ Your driver’s license doesn’t indicate how well you drive either: it’s either satisfactory or not. If you then want to become a better driver, you need to be coached based on your driving behavior,” says Wawoe.  

Modern performance review cycle for hybrid work

As mentioned earlier, the rise of hybrid work can also be a reason to implement a digital feedback cycle. After all, as employees and their managers work remotely more often, remote leadership becomes more important. This requires a different approach to feedback and ensures that attention is paid to employee development. Research conducted at Radboud University in 2022 explicitly demonstrated how hybrid work directly influences the performance review cycle. This study also revealed that, in a hybrid work environment, 360-degree feedback is indispensable for gathering relevant information about employees. This is because 360-degree feedback can help employees and managers assess employee performance in a simple and accessible way. In this way, employee performance is assessed not only by a manager but by multiple people with whom an employee interacts. These could include, for example, colleagues, suppliers, or customers. This can be structured differently for each employee or development goal. This way, an individual receives feedback from various perspectives, creating a more complete picture of how they perform, both in the physical workplace and while working remotely. Users of hrmforce can utilize the 360-degree feedback questionnaire. Read this article for practical tips on how to apply this in practice.  

Digital Performance Review Cycle in Practice

The starting point for setting up a digital performance review cycle is usually the job family structure and job profiles within an organization. The principles of the performance review cycle are built around these. Objective questionnaires can help ensure that the reviews are conducted quickly and in a well-founded manner at the appropriate level. An important consideration is effectively facilitating the various types of conversations required. In addition to in-person meetings, this often involves shorter remote digital interactions. A digital performance review cycle can also serve as a solid foundation for the approach, with in-person meetings added as needed. Keep in mind the different conversation cycles that are needed: each takes place at different times and serves a different purpose. Consider, for example, these types of conversations and their characteristics:

• Bila: The daily to-do list with specific work agreements reached during a bilateral meeting. This can take place between a manager and an employee, but also between colleagues. In addition to general notes, it’s helpful to specify for each agreement who will carry out what and when.
• Bila+: For the basic development cycle of (often operational) employees. They and their managers want to be able to initiate these discussions themselves to provide input on topics such as: Work, Learning & Development, Health & Fitness, Collaboration & Leadership, and Family & Social Contacts. With this input, a concrete action list can be established. It is also valuable to be able to document the history and progress immediately.
• Development Meeting: As part of an agile development cycle, it’s helpful if development meetings can be scheduled based on individual needs. For trainees, for example, every two weeks; for a senior employee with extensive experience, perhaps once a year or every six months. Key components of a development review include: Education & Training, Documents, Job Profile (hard & soft skills), 360-degree feedback, and the Development Plan (by competency and result area).
• Annual Review: For a development cycle in which an annual review is conducted to evaluate performance and establish development agreements. In addition to these components, employee well-being can also be assessed. The performance agreements and competencies can then be assessed separately. Afterward, a single development plan is created. It is beneficial if each annual review can be digitally signed by both the employee and the manager.
• Annual Cycle: The traditional review cycle consists of a planning, performance, and evaluation meeting. All components from the four cycles just described are included in the Annual Cycle. This can be supplemented with additional open-ended questions for each phase, for both the employee and the manager. In this way, the entire traditional cycle is digitally accommodated. As a result, the Annual Cycle becomes a very comprehensive and complete form of evaluation and development.

Setting up the digital appraisal cycle with one or more of these components requires a robust development platform. Hrmforce supports all of the components mentioned. This provides you with a well-thought-out appraisal cycle as the foundation for truly valuable conversations between managers and employees.