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Frequent Employee Feedback Is Worth the Cost and Time

Optimas 2001 - Vision Synygy's unique quarterly evaluations encourage open communication and growth.

February 28, 2001
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At Synygy, Inc.'s 10th-floor headquarters in suburban Philadelphia, the largely wall-free office and near-continuous chatter from phone conversations and impromptu hallway conferences reveal much about the company's values. Synygy, which provides incentive compensation plan management software and services for corporate giants such as DuPont, Sun Microsystems, and Eli Lilly, is a firm that prizes close teamwork and continuous feedback - not just between employee and supervisor but also between client and employee and among employees.

    "An important part of this company's culture is open communication," says Anne Luongo, Synygy's knowledge management director. "It's the sort of place where anyone can provide feedback to anyone else."

    The results are apparent. Since its founding in 1991, Synygy has grown from 7 employees to more than 260. And with annual revenue now more than $20 million, the company has become the biggest player in the incentive-compensation plan management field. But that success brings increasingly difficult challenges - particularly in the area of evaluating employees' performance and helping them set goals.

    "Back when there were just seven of us, we could just sit around a table and talk," says Ed Steinberg, Synygy's VP of recruiting and retention. "We had a very informal process. As we've grown, we've worked to find a way to keep up the continuous feedback, with more focus. But what we're trying to accomplish hasn't really changed."

    To maintain its atmosphere of teamwork and communication during a period of rapid growth, Synygy has developed a unique employee-evaluation program. One of its most striking features is the frequency of the reviews. Instead of receiving the typical once-a-year evaluation, Synygy employees are evaluated every quarter.

    "The whole idea of having an evaluation is to help you improve your performance," managing director Anil Chouhan says. "But if you're going to change behavior, you have to get the information to do it in a timely fashion. If you wait a whole year to look at how you handled something, it's too late to make changes. This way, you can decide that you need to work on these particular things over the next three months, and quickly see the results."

    To make it easier for Synygy employees to understand their performance, evaluations give them a numerical score from one to five in various areas, in addition to written comments. "For example, you might have a quarterly goal of working to implement an automated process," strategic planning and operations director Chetan Shah says. "If you finish the goal in one month, you get this score, but if it takes you two months, you get a lower score."

    And to give the scores and the evaluation process itself a more tangible meaning, the numbers play a direct role in employee compensation. The evaluation score determines up to 40 percent of a quarterly bonus, which can be anywhere from 5 to 100 percent of an employee's base pay.

    Another key ingredient of Synygy's evaluation system is the idea of feedback from many different angles. In addition to feedback from an employee's supervisor, comments and ratings can be made by department colleagues, and by employees and supervisors from other departments with whom they interact. As the evaluations go up and down the corporate ladder, staff is encouraged to contribute feedback to managers and executives. A similar process allows customers to contribute feedback on the Synygy teams that work with them.

    "I had a person in my department who wasn't doing very well," Chouhan recalls. "I was giving feedback to him about it, but I know what he was thinking,' Oh, it's just Anil, he's a stickler.' But then feedback from other people started coming in, and they were saying the same thing I was. When the comments are consistent, it really helps a person to see the situation more clearly."

    He says feedback also helps managers to have confidence in their own judgment - or to reevaluate their opinion of an employee's performance. If others bring up positive points or mitigating factors that the supervisor may have overlooked, that information also can be invaluable.

    To encourage candor, feedback contributors - with the exception of an employee's supervisor - remain anonymous. While the idea of unsigned comments undoubtedly would make some people uneasy, Synygy managers say they keep a careful eye out for obvious red flags, and employees generally learn to value the system and use it constructively.

    One challenge of Synygy's evaluation program is that it requires a serious commitment from both employees and supervisors to work effectively. Depending on their positions within the company, employees can end up writing comments for as many as 20 other employees each quarter - in addition to a self-evaluation and goal setting. For managers, the process may take an entire week each quarter. Even so, Chouhan says it can be time well spent. "If you don't do this, you may spend twice the time solving problems that wouldn't have developed otherwise," he says. "So in the end, it pays off."

    Synygy management says the evaluation program is a major factor in the company's impressive workforce metrics. In the past eight years, Synygy has terminated only 10 employees. "The system gives us plenty of opportunities to talk to someone and help them to take action to improve, quickly," Steinberg says. Conversely, the extensive detail and quantification of an employee's performance also enable the company to document the justification in the rare instance that an employee must be disciplined or fired. "With this system, we're on very solid ground," he says.

    Synygy employees at a variety of levels seem to appreciate the evaluation program and give it high marks. Paul Baddeley, a recent college graduate who joined the company last year, says the frequent feedback has helped him get off to a strong start on his first job. "You don't lose a year of your time focusing on the wrong things before you get some guidance," he says.

Workforce, March 2001, pp. 62-65 Subscribe Now!

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