For most companies, performance evaluations are a fundamental tool used to quantify, assess and measure an employee’s productivity in a role. Using metrics, feedback and other elements to rate accomplishments, identify areas of improvement and potentially further their career development.

However, studies have highlighted that many of these evaluation programs are flawed — mainly due to human bias. Many U.S. organizations share that they don’t believe their current programs are effective, pushing many leadership teams to reevaluate the tool that is expected to, in turn, evaluate an employee. In today’s workforce, the challenge of creating a responsible method of assessment is now heightened, with working from home becoming the new normal.

Thankfully, emerging technologies are inching us closer to re-imagining performance evaluations in an attempt to reduce bias and foster career development. While no assessment is perfect, it’s steering companies in the right direction by using data-driven evaluations that improve performance and encourage growth through arguably a more transparent system. This gives leadership teams more time to focus on another critical element required in the process — humanization.

What is a Data-Driven Performance?

Data-driven performance reviews are systematic evaluations that analyze an individual’s or team’s performance based on quantifiable data. These metrics often include productivity levels, project completion rates and quality of work, like for example, tracking sales figures to evaluate a salesperson’s performance or monitoring website traffic to assess marketing effectiveness.

Understandably, when access to technology was limited and manually crunching data was time-consuming, traditional performance reviews were the gold standard. However, industries have since learned the core issues that lie in their infrequency and subjectivity. They are often conducted annually or semi-annually, failing to provide timely feedback throughout the year, relying on both employee and manager to assess the employee’s performance with little to no evidence to substantiate their claims. Many times, this results in emotional and biased evaluations do not reflect the genuine contributions of the employee and areas of improvement.

Peer review software can work to address those issues by providing staff and the business regular access to data that paints a full picture. Transparency is created through an agreed-upon approach that looks at individual performance more consistently rather than an across-the-board antiquated method periodically.

With this technology, learning leaders can first establish clear performance indicators and then, secondly, outline how to meet those objectives. While key performance indicators (KPIs) vary by industry, they give a visual performance measure once decided upon. Followed by indicating future goals defined by past data collected on each of those metrics.

For example, a software company might evaluate the number of bugs reported, the speed of resolving issues and the adherence to project timelines as indicators of developer performance. Based on the information collected, software development teams can decide on the timeframes for achieving these metrics and to what degree.

Identifying employee KPIs that align with company strategy will result in progress in meeting company goals and employee performance growth, paving the way to career development.

How do Data-Driven Review Tools Work?

Many industries have made great strides in using new technologies that improve workflow efficiency. Performance review tools are no exception — they can be a very essential part of office productivity. Companies can select from a variety of software that allows them to efficiently collect and analyze data to evaluate performance on a macro and micro level.

There are many comprehensive tools that not only organize and guide performance reviews for software developers but also provide real-time data and 360-degree feedback. Managers can easily track the quality of work done, monitor performance metrics, and gather feedback from multiple sources, including peers and supervisors.

A holistic view of employee performance facilitates more informed decision-making and targeted development initiatives. This can hold value in an industry in which new technologies, like spatial computing, are continuously emerging and advancing.

Some companies are setting their eyes on generative AI as a tool to reduce time spent on the inadequacies of a manual employee assessment. Instead, utilizing it as a way to support those in leadership roles to create assessments and development plans.

For example, AI can collect, examine and summarize large amounts of data that can easily be communicated in a concise format for managers to review. It can also pinpoint patterns and trends in the employee’s work that would have otherwise been easily missed through a standardized evaluation. This emerging technology can also use this detailed information to identify areas of excellence and improvement unique to their role and desired career paths.

Data-Review Tools don’t Humanize Reviews, Leaders do

Much of our work and daily lives are centered around our emotions — dictating how we react, collaborate and communicate with one another. It’s an important concept to remember in terms of how we perform at work and even more critical when conducting an evaluation.

Humanizing reviews should evolve with the new generation of employees — Gen Z, the generation that’s more likely to expect their work environment to foster creativity and skills building for career development, in addition to providing remote work flexibility. These elements should be incorporated with a human-centric approach to the review process.

For example, leaders are encouraged to leverage their time to become empathetic in their management style.

The idea is to use a combination of data-driven review technology to provide transparency and accountability, led by leaders who use active listening and understanding to evaluate and encourage employees’ performance effectively in today’s ever-changing work environment.

Successfully approaching performance reviews from both angles can have a far-reaching impact, elevating the growth of the individual, team and company.