Performance review time in any company is detested by most managers and employees. Most companies continue to follow the same old process of reviewing every candidate just once a year and make changes to compensation based on the outcome of the review. How can a manager expected to remember all the events from the first day of the year to the last? Is it right to expect a manager to record every significant event with the employee during the year? Should we expect the employee to accept feedback based on 'remembrance' of the manager?

If we seriously consider using performance reviews to provide quality feedback to improve the professional life of a employee, shouldn't the system be designed to collect the highest quality information on the person throughout the year? The highest quality of data is of utmost necessity to provide the highest quality feedback. Identifying completion of a project on time, with quality is the easy part of judging the performance. The hard part is to understand 'why' the project was not completed and to improve on skills and the work place values/character of the employee to enable him/her be more productive at work. Let us try to understand the requirements for a perfect performance review system.

The ideal system should be continuous, easy to use, efficient to track improvement or degradation and be designed to manage talent. Let us take it one step at a time. Typically, managers collect performance data on employees once or best case twice a year. I have seen some managers collecting data during the performance review time to substantiate their claim or knowledge of their employee. 360 reviews and peer reviews are talked about often, but, are rarely used effectively. An ideal system should enable anyone to provide feedback on any other employee at any time of the day. For eg., an engineer at the lowest rung of GE should be able to provide an opinion on the CEO based on his/her interaction with him during an all-employee meeting. The manager, with an access to the feedback of his/her employee should be able to check the data and provide feedback to the employee on a continuous basis (throughout the year). Such continuous feedback detailed with the context and the relevant time frame goes into improving the performance of the employee on a continuous basis.

Secondly, the performance review system has to be easy to use for anyone, anywhere and anytime. With the issue of having to remember events of relevance from a year ago for the reviewer, it makes it harder if the system requires the reviewers to write in detail of not only the performance but also the context. In an age of Facebook and Twitter where citizens express 'what they are doing?' in less than 140 characters, employers cannot and must not expect employees to provide detailed write ups during performance reviews. The system should be designed to not only receive feedback from anywhere, anytime but also be intelligent to make most of the few characters that the feedback is based on. Once the system is available on a continuous basis and is as easy as tagging a person, the feedback system will prove useful to not only the employee but also the entire organization.

Next, once the feedback is received, the system must be designed to track improvement or lack of improvement. Once the employee's performance is reviewed with him/her, the system should also be capable of monitoring the change on a continuous basis. In a perfect world, the employee would strive to improve on objections raised during the review and would like to see the results of the improvement (positive reinforcement). In the worst case, the system should provide the option for the manager to notice degradation of expected values and work with the employee to change course.

Last but not the least, the system with its intelligence and all the skills and performance data of the employee should enable managers within the company to identify the right fit for the employee. If the employee is not performing well in the current group, the question to ask is 'does he FIT well into this group? If his skills and values do not match with the culture of the organization, the question should be 'will he be a better FIT in another organization within the company?' or more importantly ' where would the employee be the BEST FIT?' in the company. A well designed performance review system should not only be able to collect data on a continuous basis but also enable managers make the right decision for the employee and the organization with the data.

Do the requirements for a perfect performance review system sound too ideal? Can it be done? YES, WE CAN!