Now that a third of American workers are between the ages of 18 and 34, millennials make up the largest generation in the workforce, and their presence will only become stronger. Millennials are expected to account for nearly half of the workforce by 2020. As more and more members of this growing generation have joined the workforce, they have introduced new ideas about work and how it gets done, leaving many employers scrambling to address their needs.
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How have millennials impacted the workplace? More so than any previous generation, they have demanded flexibility in where, when, and how much they work, ushering in more extensive telecommute and flexible scheduling policies. They are also more concerned with making an impact on the larger community than previous generations were, with many millennials valuing meaningful work over high salaries.
But perhaps one of the most significant changes spearheaded by millennials is the shift away from the annual performance review in favor of regular, ongoing feedback.
The Problem With Traditional Performance Management
The truth is that it's not only millennials who are tired of the traditional performance review. In fact, employees of all generations are fed up with it. It's simply that millennials, who grew up with the Internet, may be better at voicing their opinions about the situation, given how comfortable they are with posting blogs and sharing on social media.
Furthermore, many companies are starting to find that managers malign traditional performance reviews just as much as their employees do.
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The fact is that the annual review process may be doing more harm than good in terms of developing, engaging, and retaining talent.
One of the main reasons why is that performance reviews typically classify people as "exceeding expectations," "meeting expectations," or "not meeting expectations." According to Dr. David Rock of the NeuroLeadership Institute, being categorized triggers a fight-or-flight reaction in people, which in turn can interfere with the impact of the feedback being given – even if it is positive.
Just consider what happens when an employee is told they "meet expectations." This middle rating is often associated with a "C" grade. Even though the manager might think it's positive, the employee might interpret it to mean that they're not sufficiently appreciated for all they do. In turn, they may seek employment elsewhere.
The other major problem with traditional performance reviews is that they focus on a single, aggregated point in time: the individual's performance over the entire past year. As such, traditional performance reviews fail to provide employees with immediate feedback on how they are doing today. This delayed response is a surefire way to lose the interest and engagement of millennial employees especially, who are accustomed to receiving instant feedback on social media in the form of "likes" and "shares."
The Value of Real-Time Feedback
So, what's the solution? Companies must address the needs of their millennial employees – and employees of any age – by providing instantaneous and ongoing performance feedback. This feedback shouldn't be one-sided, but rather a dialogue in which an employee and their manager can have meaningful discussions about performance – what they are doing well, areas in which they can improve, and how they can continually grow and develop. When feedback is delivered in a coaching-like capacity, managers can communicate in real time with constructive insights and ensure that feedback is connected to current goals and projects.
Given that millennials constitute a significant portion of the workforce today and will continue to for quite some time, organizations must adapt their talent management processes to meet the unique needs and preferences of this cohort – needs and preferences that also happen to be shared by employees of many ages. This is especially true regarding the delivery of performance feedback.
Executed effectively, performance management can raise morale and motivation – so why let the opportunity go to waste?
Rishav Gupta is founder and CEO of TalentFirst.