Would you consider your firm innovative and at the cutting edge of its industry? If the answer to that question is “no,” ask yourself why. It might have something to do with a business process you wouldn’t expect: employee reviews. Bad employee reviews can actually make a company less innovative. Read on to learn about the relationship between innovation and 360 employee reviews.

What Leads to Innovation?

An innovation refers to a Latin term for something new and different. In business, everyone wants to innovate because it makes them more efficient and profitable.

In digital marketing agencies , employees play a significant role in making the agency more innovative. Their ideas, comments and feedback can lead to a new idea for a service or product that could make their firm a market leader.

Businesses can encourage employee innovation by creating environment in which employees feel free to come up with new ideas, without being afraid that they’ll be criticized or intimidated.

What Happens When Employees Receive a Bad Review

Sometimes, employers actively discourage innovation through certain business practices. One of these practices is the employee review. To avoid such take a read on Proper Etiquette of Giving Feedback to an Underperforming Employee.

Psychological research shows that when employees receive negative feedback, they do not perform better. In fact, they are actually discouraged by it.

Receiving a less-than-glowing review makes you focus on the criticism your boss delivered. All you can think about is why you received this feedback, rather than what you’ve done right and how you can do better. And you definitely won’t be concentrating on new ideas that will improve your firm.

Bad Employee Reviews Kill Innovation

Microsoft is an excellent example of how negative employee reviews killed innovation. The corporation utilized a system called “stack-ranking” to rate employees. Every unit had to declare a certain percentage of employees as top, good, average and poor performers.

Former employees of the company claim that they spent more time focused on competing with each other than generating new ideas that would attract more customers. As a result, Microsoft lagged behind other firms when it came to cutting-edge innovation. Moreover, many of its employees left because they hated being in such a restrictive environment.

Encourage Innovation through 360 Degree Feedback

If you want your company to inspire its employees to innovate, choose an evaluation system that gives them constructive feedback. Grapevine Evaluations 360 degree employee review software allows HR professionals to customize questions so their organizations get the data they need to succeed.

Grapevine Evaluations are trusted by such companies as Pandora, Macy’s, and Thomson Reuters.

Contact us for a one on one demo.