Performance Management: Amazon Performance Tools & Business Practice Osmosis

Real-time performance management enters a new era.

At first glance, Amazon’s now infamous Anytime Feedback Tool – which employees can use to submit reports to managers about each others’s performance – might look like a hi-tech way to gossip about your colleagues. But, when you combine it with the online retailer’s Organisational Level Review performance management system, which ranks staff by their achievement and then ‘yanks’ the lowest rated, the app’s career-halting powers become more nefarious.

Far from having a negative impact on working culture, Amazon says its use of technology helps motivative high performers. But though the company is an extreme example, British businesses are beginning to embrace similar ideas.

Workday (which counts Amazon founder Jeff Bezos among its investors) offers an instantaneous performance management app. Cornerstone OnDemand says it is starting to see more UK organisations use software to give feedback on the go; jewellery company Pandora uses its products to rate retail staff during mystery shopping exercises.  The company believes such tools are just an extension of the move away from the idea of annual appraisals.

As damning as The New York Times was of Amazon’s techniques – it claimed, among other things, that staff clubbed together to target certain co-workers and thereby save their own jobs – they do have an upside. “Our research clearly shows that peer feedback is essential when work depends on successful collaboration, innovation, and other individual initiative-based activities,” says Tammy Erickson, adjunct professor of organisational behaviour at London Business School. “Managers can’t accurately assess individual contributions in these areas.”

But Erickson warns this isn’t a route that suits every organisation. “Amazon has retained the old idea that feedback should flow hierarchically – up to a boss, then back down to the individual. This combination fundamentally won’t work,” she says. “It mixes a hierarchical approach that was well-suited to oversight of standardised manufacturing processes, with a peer approach appropriate for today’s evolving knowledge of work.”

Geoffroy de Lestrange, product marketing manager EMEA at Cornerstone, agrees: “Writing comments about someone without that person being aware of it, or having any opportunity to react, is not only ethically questionable, it’s also completely useless.”

And many experts are less enthusiastic about adopting these principles altogether. “The costs simply outweigh perceived benefits,” says Professor Chris Rowley of Cass Business School. “Anonymous assessment rarely promotes objective feedback, not least as it is only capturing spur-of-the-moment views.”

Reference

People Management (2015) Amazon’s Feedback Tool is Coming to an Office Near You. People Management: Magazine of the Chartered Institute of Personnel and Development. October 2015, pp.14.

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