Are Annual Performance Reviews Outdated? : An Empirical Analysis on Continuous Real-Time Mobile Feedback in the Workplace

In order to deliver real-time performance feedback to support rapid innovation, companies are replacing annual-review based performance management with systems that enable frequent and continuous evaluation. Mobile applications enable employees to give, seek, and receive real-time, competency-based feedback using their smartphones. In this study, we examine the role of mobile real-time feedback in employee performance appraisals. First, we find that the relationship source (peer, direct report, or supervisor) impacts real-time feedback: Employees tend to be more critical when they are supervisors. What is more interesting is the effect of favoritism and retribution in mobile real-time feedback: Supervisors adopt tit-for-tat strategies but peers do not. Interestingly, 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. Our findings have direct implications for the design of new performance management systems. Further, we highlight how companies can use information systems to create an innovative human resource operation that delivers flexibility and agility