Many companies have recently begun to reevaluate how they review employee performances, coming up with all sorts of potential improvements to the traditional performance review. But no matter what, most business leaders can agree on one thing: They need to know how well their employees are fulfilling company objectives.

Increasingly, these two goals – more efficient, cost-effective performance reviews and comprehensive knowledge of employee performance – seem to be mutually exclusive. How can you gain an in-depth understanding of your employees’ performances if you don’t spend a great deal of time and money on the task?

Luckily, there is an answer – one that satisfies both camps: automate your performance review process. Automation saves thousands of dollars and makes the process faster, while still delivering the in-depth knowledge that business leaders want.

The Costs of a Traditional 360-Degree Review

A 360-degree review is the most expensive way to evaluate employee performance. During this type of assessment, several employees (an individual’s direct supervisor, colleagues, subordinates, and sometimes even customers) answer questions about one person’s accomplishments and on-the-job behavior over the past year.

This method of assessing employees costs so much time and money because it takes the reviewers away from profit-earning tasks. After the reviewers complete their evaluations, the HR manager must analyze the results and then provide this feedback to the subject’s manager, who must then go through it all with the employee. The manager, too, isn’t able to get their regular work done during this process, which has an adverse affect on the business’s  profit.

What Does ‘Automating’ Really Mean?

With an automated review process, the person or team responsible for designing the assessment can choose from a variety of preloaded competencies and questions, usually stored in a software database of some sort. That way, nobody has to spend hours creating questionnaires for reviewers to answer.

Generally speaking, most performance review automation software will also give users the ability to customize their reviews with original questions or competencies, so nobody is stuck using a database of questions that doesn’t quite meet their needs. Most of these systems will also allow you to brand your reviews with a logo, adding an excellent professional touch to the process.

NotebookSo, when companies automate the assessment process, they don’t turn it all over to computers. Human beings still do the assessing. The software can help, however, make the whole process run much more smoothly and cost-effectively.

A More Efficient Review Process

If you currently rely on a traditional review process to assess employee performance, take a few minutes to estimate how long the entire procedure takes. Factor in how many hours (or even days) it takes you to decide which metrics and questions you will use in the process. Don’t forget to add the amount of time reviewers spend answering those questions – or the amount of time spent chasing people down to submit these forms. And, of course, tally how many hours you devote to analyzing the results of the assessment, too.

You and your employees could be spending all of that time completing work that earns the company money. Automating the review process means that managers and HR professionals dedicate less of their valuable time to creating assessments and gathering data. Furthermore, automated assessment forms are easy to fill out, so reviewers won’t have to take so long on the task.

Analyzing the results also won’t take as long either, because many 360-degree evaluation software programs present the data they gather in clear, understandable graphs and charts. Most of these systems provide the data and reports in real-time, too, so they can be distributed instantly, shortening the overall process so you can get back to your normal routine.

A More Affordable Review Process

When many business leaders hear the word “software,” they immediately jump to the conclusion that their firm will have to invest a great deal of money in a technology that will quickly become outdated. Concerns about wasting money can prevent companies from embracing automated review processes.

360-degree review software doesn’t have to be expensive. In fact, advances in technology have made it more affordable than ever. Most 360-degree assessment programs operate in the cloud. Running software in the cloud means that you don’t install it directly to your hard drive. Rather, the software operates in a data center, where virtual computers host it. You can easily access cloud-based 360-degree evaluation software by opening a secure Web browser and logging into the software’s site.

When software runs in the cloud, you don’t have to pay for pricey licensing and installation fees. Instead, you’ll pay a small amount of money for each person who uses the software. That amount tends to be quite a bit lower than licensing fees for on-premise computer programs. These solutions typically run on tiered pricing models, making them scalable for any size organization.

BeachA Question of Savings

Automating the 360-degree review process saves valuable time and money. In light of this information, business leaders have to ask themselves, “How much is clinging to our traditional performance reviews costing us?”

Chances are that the answer will be, “More than we’d spend on an automated 360-degree evaluation.”

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