The impact of real-time feedback in employee reviews

To deliver real-time feedback to support employee development and rapid innovation, many companies are replacing formal, review-based performance management with systems that enable frequent and continuous employee evaluation. New research in the INFORMS journal Information Systems Research examines the role of these applications to understand the effects on employee performance appraisals.

The study, "Are Traditional Performance Reviews Outdated? An Empirical Analysis on Continuous, Real-time Feedback in the Workplace," was conducted by Michael Rivera and Subodha Kumar from Temple University and Liangfei Qiu from the University of Florida. The authors found that the relationship source (peer, subordinate or supervisor) impacts real-time feedback, which tends to be more critical when it comes from supervisors.

"What is more interesting is the effect of favoritism and retribution in real-time feedback: Supervisors adopt tit-for-tat strategies, but peers do not," said Kumar, a professor in the Fox School of Business at Temple. "We also uncover that men rate women higher than men, and that women rate men and women similar to how men rate men."

In addition, positive real-time feedback has a stronger effect on future ratings than negative feedback.

Real-time feedback applications enable supervisors and employees to give, seek and receive competency-based feedback using their computers, smartphones or other devices.

The authors used data from five different organizations using the platform DevelapMe. The organizations spanned several industries including pharmaceutical, healthcare, interior design and payment processing. The data consisted of around 5,000 instances of feedback.

"Our findings have direct implications for the design and implementation of performance management systems," said Kumar. "We highlight how companies can use information systems to create an innovative human resource operation that delivers flexibility and agility."