#Employee Feedback Is The Killer App #HRComments Off

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A new market has emerged: Employee feedback apps for the corporate marketplace. These tools are powerful and disruptive, and they have the potential to redefine how we manage our organizations.

As the economy grows and the job market gets hotter, employee engagement and retention have become a top priority. As I discuss in Why Culture is the Hottest Topic in Business, most CEOs are bending over backwards to make their company a “great place to work.” Free food, unlimited vacation, yoga classes, and lavish educational benefits are becoming common… and in some cases, even wages are starting to rise.

As attention shifts toward the health and happiness of staff, employee engagement remains surprisingly low. Gallup tells us that only about 1/3 of employees are actively engaged, Glassdoor data shows an average engagement of a C+ (3.1 out of 5), and Quantum Workplace believes engagement is at its lowest level in eight years.

If we look at employee ratings of employers as a whole, we find that performance follows a bell curve. I’ve analyzed data from Glassdoor, a website which lets employees rate their employers, and you can see the distribution below. While some companies are doing very well, many are doing quite poorly — and the data shows no easy-to-spot patterns.  The highly engaged organizations are all shapes and sizes:  all industries, all sizes, and all ages.

Why is there such a wide variation in employee engagement and retention?

The answer is clear: building a highly engaged workforce is difficult.

As described in the Deloitte University Press article Simply Irresistible, there are 20 distinct factors that contribute to employee engagement, ranging from the quality of the jobs to the quality of management, career progression and opportunity, learning culture, and level of recognition. So these highly engaged companies are doing a lot of things right.

And the problem is getting harder. Today employees are more empowered, mobile, and demanding than ever.

New research by MRInetwork shows that 90% of recruiters surveyed believe that “candidates are now in charge” – the highest this metric has been in five years. So if you aren’t thinking about how to keep your people happy, they might pick up and leave (or even worse, stay and undermine you).  Research shows that unhappy employees who stay can be a bigger problem than those who leave – they have an oversized negative impact on everyone else.

What can we do? How can a CEO, manager, or even HR team keep up with everything everyone needs?

The Solution: Employee Feedback as the Killer App

Our research shows that a new approach has arrived:  open, anonymous, employee feedback.

Just as customer feedback has transformed the customer experience, employee feedback is transforming the employee experience.

Consider what feedback and ratings have done for our lives as consumers. We can “like,” “rate,” or “evaluate” almost everything we buy – leading to a better shopping experience, better customer service, and products that more quickly adapt to our needs.

In the case of employees, the tools being unleashed are likely to change the way we run our businesses, totally redefining the way we think of “employee engagement.”

Redefining the Term “Feedback”

Let’s talk about the word Feedback.  At work the word often has a negative connotation. When a manager has a problem with someone, they often pull them aside and say “hey, let me give you a little feedback.” And most likely our heart starts to flutter and we immediately get worried and defensive.

In this new world we have to redefine this word and look at Feedback as a positive, constructive concept that can unleash innovation, solve problems, and create empowerment in the organization.

As one consultant put it to me, we should use the concept that “Feedback is a Gift.”

  • Feedback is a gift to give (i.e., we should give it kindly and with respect) and
  • Feedback is a gift to receive (we open it carefully, take it with respect, and thank the giver).

If we think about Feedback in this way, we can open the floodgates to constructive suggestions – and find a myriad of ways to run our operation better.

Is it scary to think that employees can give us their opinion any time they want?  Of course it is – but that horse has left the barn. People now post information about their workplace on a variety of online sites (Glassdoor, Facebook, and others) or share information privately with their friends.

Learning From The Ratings Economy

To better understand this trend it’s instructive to look at the consumer marketplace.

Today we live in a Ratings Economy – we can rate almost anything. (Even the US Postal Service now uses Yelp.)

On Uber, for example, you rate the driver and the driver rates you. This helps Uber find problem drivers, but also lets the company find problem customers. (Uber drivers have told me that riders who are rated poorly actually have a harder time getting rides – I haven’t confirmed this but it certainly would make sense.)

eBay  pioneered this idea by letting buyers rate sellers and sellers rate buyers. Anyone who has done business on eBay knows how effective this system can be, and many consider eBay one of the first trusted, quality-oriented, and service-centric marketplaces.

NetPromoter or NPS has become a major force in the ratings economy. With one question (“How well would you recommend this product to others?”) we can evaluate any product or service.  In the case of the employee experience, vendors have created an eNPS (employee net promoter score) as a single measure. The eNPS simply asks “how well would you recommend this company to a friend?”

This Ratings Economy has encouraged many companies to let people rate managers, programs, courses, and internal systems. Laszlo Bock, in his book WorkRules, describes how Google encourages employees to rate their managers, for example.

As the ratings economy has expanded, we’ve learned more about how to optimize the feedback mechanism:

  • As ratings and text feedback comes in, people can often Upvote or Downvote others’ comments, creating a “double-loop” dynamic. The organization can see which suggestions are highly regarded, helping to prioritize input and which actions to take.
  • You can often “Rate the Ratings.” Yelp, for example, lets you rate reviews as “useful, funny, or cool.” This lets raters gain greater credibility, and raises the bar for “useful feedback” from others.  Amazon.com lets us see the “most helpful reviews,” by letting readers evaluate the usefulness of reviews.
  • Systems let you self-rate your own comments. One vendor lets employees rate their employer in categories and then asks them to go back and prioritize each answer – forcing the employee prioritize his or her input.
  • Social systems now “Rate the Rater,” a mechanism which shows what kind of evaluator you are. People who write highly valued ratings in Amazon, for example, become “Hall of Fame Reviewers” – making their voice more credible than others.
  • Sentiment analysis and text analytics tools can monitor and help censor unsavory comments. If someone is abusive, releases confidential information, or swears, the software can find this behavior and remove it before it appears in public. Several vendors (Kanjoya  for example) offer such tools and others (such as Bettercompany.co, Getthememo.com,  Glint, and TinyPulse) monitor and police comments for abuse or let an administrator review comments before they are publicized.

So Feedback is not a new idea and the mechanics are generally well understood. As these systems grow and evolve in the consumer marketplace, they have now entered the corporation. If you think about the Feedback Economy in the context of business, it feels more like an “always-on” suggestion box.

The Need for Anonymity

We can’t talk about feedback and ratings systems without discussing the issue of anonymity.

While ratings in a consumer website may or may not be anonymous, at work anonymity is critical. In the consumer world, if you poorly review a restaurant or “down rate” a driver, there are likely no major consequences to you – in fact it can be a good thing, because the company can get back to you to address your problem.

At work, however, the ramifications are different. If you “down rate” your boss or say something critical about the company (even in a constructive way), you may be labelled a “trouble maker,” which now reflects poorly on you.

In our prior company (Bersin & Associates) I always valued people who complained a lot, it taught me what I needed to do better. In large companies, however, this kind of behavior is often not appreciated- so people who “speak up” often take career risk.

In some cases the issues are highly sensitive. If people point out process or workplace problems then they are likely to bring up safety issues, sexual harassment, management dysfunction, process inefficiencies, and other problems which could embarrass a manager or create legal risk for the company. So if you know who the complainer is, there may be a natural tendency to retaliate or even suppress their ideas.

The answer is to make the system anonymous, and assure employees that the company absolutely will not know who they are. (This is the approach seasoned HR managers take with any investigation.)

While most employees don’t really trust that surveys are anonymous (after all, they did arrive in my email inbox!), these new tools work hard to assure people that they are (more on that topic below). This means that you, as a business or HR leader, may have to bend over backwards to make sure you never let the system expose anyone’s identity and that the tool you use aggregates data in a fair way so people’s responses can never be traced back to an individual.

Should you “censor” or “approve” feedback to share?  Absolutely yes. Despite best efforts to make these systems constructive and business focused, we’re going to find people who have an axe to grind, may have been treated unfairly, or perhaps are just vindictive by nature. It’s important to manage these systems well so we don’t let insulting, abusive, or confidential information flow through the company.

It’s also important to realize that some comments may open legal issues. Some union contracts, for example, prohibit employers from surveying their people – or they require the union to approve. If an employee opens a workforce complaint, some states may put the organization on notice, so HR has to monitor some comments.

Remember, however, that these systems are freeing real employee comments, so as they grow leaders have to ready to listen, ready to respond, and ready to learn.

My experience with these systems, and I have now talked with dozens of companies using them, is that organizations that create a “listening” culture can gain a competitive advantage over their peers. These companies can open a deep well of innovation and ideas, giving people a sense of empowerment and ownership.

Removing Friction: The Importance of Simplicity

You may say “we do employee feedback surveys already” or “we have a suggestion process in the company now.” Well that may not be enough.

One of the things we can learn from the ratings economy is that great feedback comes when the process is incredibly easy. If we remove friction from the process (make feedback easy and in the flow of work), the feedback becomes richer.

New feedback apps now let you mouse over a five-star box to give something a rating. Modern pulse surveys appear in your email and let you answer inline without clicking a link or opening a survey.  Vendors are starting to attach their ratings to emails or other systems, letting us give feedback in the flow of work.  (Think about a feedback box attached to every presentation, email, or document we receive, for example.)

And the questions they ask are simple and short.

A question like “how are you feeling about work?” is enough to give useful trending information. The Japanese app Niko Niko, for example (borrowed from Japanese manufacturing quality programs), lets employees give their boss a “smile, flat, or frown” face at the end of each day. This simple tool gives managers an instant sense of how things are trending, pointing to potential problem areas. Vendors like Trello (an online productivity app) embed this functionality right into the daily flow of work.

Fig:  Niko Niko Board Gives Immediate Daily Feedback

A recent article in the Washington Post shows that even the TSA is now implementing “real-time feedback” kiosks to let people give instant feedback on their service. The website, http://www.feedback.usa.gov tells it all.

Not Surveys, Simple Questions

We don’t need to develop long surveys with long questions. Think about questions like “what was one thing that went well for you this week?” or “what is one thing that wasted your time this week?” These simple questions, asked regularly, help companies and managers gain immediate feedback and see trends.

A national food service company implemented a pulse feedback system and discovered that the drive-thru service window was causing operational glitches in staffing. (People were running back and forth between the drive-up window and the in-store window, rather than having someone dedicated to drive-thru.) A store employee found a fix and within weeks this “suggestion” became standard practice around the country.  Think about how many such “fixes” you probably have in your company.

A sales and marketing executive at a fast-growing software company told me he pulses his sales people with one question every week.  (The questions range from “How well did the week go?” to “What got in our way this week?” – their vendor provides the bank of questions.) He told me that he can now predict the following week’s sales based on the results of last week’s pulse survey.

I just finished a meeting with an HR services company and we brainstormed a feedback app that could help leaders make meetings more effective. The app would let you rate each meeting you attend and immediately provide feedback to the meeting organizer on the utility of the session. We could then rate and rank meeting leaders, look at which meetings should be shorter, and… well you can imagine the possibilities.  (One particular app, Waggl.it, is designed specifically for this type of usage.)

Do These Tools Work? Yes, When Designed Well. 

Wait a minute. Aren’t we already over-surveying people? Aren’t they already “surveyed to death?”

Perhaps, but remember these and similar apps are not surveys, but feedback systems.  One version of them is the “pulse survey,” but ultimately they can do much more. They are not long surveys.

The software executive I mentioned above told me that 85%-90% of people respond to his weekly pulse survey — primarily because they know that management is listening and the survey takes only a few seconds to complete.

Earls Kitchen and Bar, a fast-growing Canadian and now US-based restaurant chain, uses pulse surveys to stay in touch with their staff in every restaurant. As any of you who have worked in food service know, there are hundreds of things that can get in the way of efficient service in a restaurant. Employees in the stores see what’s really happening and they often have the best suggestions on what to fix. Mo Jesse, Earls’ CEO, credits his company’s financial turnaround with the detailed feedback they receive directly from employees.

As Mo put it, “I could have redesigned the menu, hired new chefs, or redesigned the facilities… but rather than try to decide what to do, I let our employees tell me.” He created a  ”listening campaign,” and dozens of good ideas emerged. I won’t give away their secrets, but the results have been significant.

People Analytics: A New Source of Actionable Business Data

One of the hottest new areas of HR (and business) is People Analytics:  mining employee data to understand ways to improve business performance. Well this data stream may be one of the most valuable you have.

Remember that feedback data is like the canary in the coal mine: it tells you that something is wrong, even if you’re not completely sure what it is.

A Swiss investment bank, which has been studying its employee data for years, told me that the single leading predictor of  business unit profitability is “employee engagement.” Imagine what they could do with more current and actionable data.

And Feedback goes well beyond employee happiness, by the way. Once you implement a feedback app you will get help with business performance, turnover issues, theft and abuse, compliance violations, customer service issues, and a whole variety of other operational issues. When sales productivity is low, turnover is high, quality issues arise, or you have theft or compliance problems, the feedback and comments from people should alert you immediately to the problem.

Will you get “noise” and “junk data” in the system?  Of course you will, so it’s important to set standards. Tell people that personal comments, discriminatory and inflammatory statements, and other types of disparagement are not permitted.

Disruptive to the Engagement Survey Market

This market is new, growing fast, and likely to become a billion dollar market over the next few years. Today companies spend more than $1 billion on annual engagement surveys, and most tell me these are not getting the value they want. While the annual survey has become an institution in many organizations, I believe they will be replaced by these pulse and “always on” systems in the next few years and the incumbent engagement survey vendors will have to adapt.

One of the reasons the traditional engagement survey market is under so much pressure is that the concepts and principles of employee engagement have really changed. As I discuss in It’s Time to Rethink the Employee Engagement Issue, annual engagement metrics are not actionable enough for most managers. Being a “Simply Irresistible” organization is an everyday topic, and managers should constantly think about ways they can make work easier and more enjoyable. Employees today are like volunteers, always willing to tell you what we can do to make the business better.

We just need to give them the right opportunity to speak up, then listen and take action.

The Impact on Performance Management: Let Employees Rate their Managers

One of the biggest issues facing HR departments today is the need to redesign the performance management process. Not only are many companies doing away with ratings and simplifying the process as a whole, they are now realizing that the manager-led process has flaws. If managers are here to help and coach their people, shouldn’t the employees also rate the managers?

We know managers are biased. Research shows that 61% of a “rating” is based on the bias of the boss (not actual employee performance), so it makes sense to let employees rate the boss for a more balanced perspective. If a manager is particularly hard on his or her people, this feedback loop helps balance the system.

The performance management market software market is picking up on this.  A new breed of performance management systems enables managers to check-in with employees on a regular basis and lets employees rate the manager on a regular basis (displaying aggregate data, so employee identity is protected).

The theme is to reduce the unilateral power of managers, and opening up decisions to a larger group. (Google, for example, does not let managers unilaterally rate employees or decide who to hire because managers act in their own self-interest. They bring these decisions to a higher level to make sure major people decisions focus on the entire organization rather than only a single workgroup.

Vendors like TMBC, Reflektive, Engagedly, Workday, SuccessFactors and others are embedding ongoing feedback right into their performance management tools – redefining the multi-billion dollar market for performance and talent management.

(I personally believe team feedback will become a standard feature set in all performance management software soon.)

The Vendor Marketplace Today:  Four Emerging Categories

Let’s talk about the marketplace. Innovation is rapid and there are dozens (perhaps hundreds) of startups entering the space. They tend to fall into four broad categories.

1. Next Generation Pulse Survey and Management Feedback Tools

The first category is what I call “next-generation” pulse survey tools.

These companies, like CultureAmp, TinyHR, Glint, Perceptyx, BlackbookHR, Culture IQ, OfficeVibe, Waggl.it, GetHppy, Impraise, ModernSurvey, VirginPulse, and Thymometrics have developed efficient systems to rapidly survey employees with short, easy to take surveys. Traditional survey vendors like Gallup, IBM (Kenexa), CEB, Sirota, Qualtrics, and others are likely to produce these tools.

The startups are winning over customers because their tools are easy to use, inexpensive, and designed for mobile  use. They use a variety of methods to engage people (some are surveys, some are online dashboards), but their #1 focus is making it feedback easy.

The tools are also designed to let managers send quick surveys directly to their team, so for example the VP of sales (per the example above) can easily pulse his or her sales team on what’s bugging them each week.

While these companies provide various types of surveys and measurement dashboards to view results, they also have other features that can be useful for performance reviews, management assessments, and other feedback events.  For example:

  • Reflektive lets employees provide feedback to other employees or teams directly in Outlook, so you can provide “feedback” to a person or a team while sending email.  SmallImprovements, TinyPulse, and StandOut by TMBC are other tools that are moving in this direction.
  • 15Five and Trello sell tools that combines task management with feedback to integrate how you feel with what you do each day.  Slack is now offering this as well.
  • Waggl.it is designed to enables pulse feedback after a meeting, presentation, or other business event.

Since the market is so huge, vendors focus in different segments. Some (like Glint, CultureAmp, TinyHR, Blackbook, CultureIQ, Qualtrics) are specifically targeting the enterprise corporate engagement survey space.

Others are focused on “fast multi-purpose feedback” (Thymometrics, Waggl.it, Impraise, TinyHR), and some of their clients use them as complements to an annual survey. Thymometrics, for example, plots and visualizes team “mood” over time.

In time we will see these tools embedded into work management systems. Think about work productivity tools like Slack, Jira, Basecamp, Huddle, Trello, and Sharepoint. These are each effective platforms to embed “feedback” as well. While they may not be anonymous, there are many benefits to commenting on a project or a meeting right in the flow of work.

As I talk to corporate HR managers, most are starting to experiment with these tools and many expect to replace their annual engagement survey over time. The new vendors are building standard questions, producing industry benchmarks, and creating enterprise reporting to meet this need.

2. “Open Suggestion Box” and Anonymous Social Network Tools

The second category is a more radical new set of technologies I’d call “category busters” – tools to enable anonymous social networking and ongoing discussions among employees. These are startups trying to build the “YikYak,” “Whisper,” or the “Secret” of business.

A History of Anonymous Social Apps

Anonymous social networks are not a new idea – in fact the very first social network, MySpace, was anonymous. With the advent of mobile apps, such anonymous networks have re-emerged with a vengeance. Over the last few years history has taught us a lot: these systems are complex and hard to predict, they need to be purposeful in their design, and they need strong privacy protection.

Secret, which published its mobile app in late 2013, rapidly became a phenomenon in Silicon Valley and turned into an “online chat room” which many used to publish rumors, disclose confidential information, troll for sex, and generally bash or complain about anything that bothered them. The tool was hacked a few times and people were never sure if their identity was truly anonymous, creating buzz around the tool’s lack of security. Several major business rumors and sexual harassment issues were surfaced on Secret, and as a result the founders shut the system down around the end of 2014.

Whisper, which continues to function, was accused of spying on its users, but later “proved” (through legal and senate hearings) that the company has put in place barriers to prevent anyone from identifying the IP address or phone number of a user. The issue of whether or not posts on Whisper are really confidential continues to be an open topic of debate.  (Every mobile device has a unique identifier and can often broadcast an IP address which does identify the owner, so confidentiality can be considered not only a technical issue, but also one of business process.) Whisper uses photos as its paradigm for sharing information, and it is often used by students. It has a lot of personal and relationship-related traffic, but enables its users to downvote or report abuse to help keep the site clean.

YikYak, which is a similar system but focused more on young people and university students, continues to grow, now enabling people to post photos and create group chats on various topics and themes. It enables upvoting/downvoting and also lets individuals “peek” into groups that others have joined. It lets you identify your location so you can see “Yaks” from people close to you (often used for hookups and dating). While the app has been criticized for cyber-bullying, it appears to be quite popular among young people and students.

A work-focused social network, however, is there to help the organization get better – so it’s important that a system enables confidentiality when information is sensitive. We are in new territory here, and many of the vendors in this space are experimenting with ways to keep the conversation positive.

One in particular, Bettercompany.co, focuses particularly on helping users create a “circle of professional friends,” albeit anonymously. While the app is still new, it appears to have created a very positive and constructive environment filled with support and advice. Another, Getthememo.com, lets users see comments on any company posted and then “follow” companies other than their own.

We can learn more about these systems by looking at the history of Facebook. Before Facebook there was MySpace, a social network which let people create anonymous identities and post whatever they wanted. Facebook proved that by requiring people to identify themselves, they could help create a more “friendly” and real environment for communication.

These vendors should be careful. Since it is illegal to slander people, disclose confidential information, or even disparage products and services in a vindictive way, vendors that open up its system for “anonymous feedback” take a risk that they will be asked to disclose their participants (or censor information) if it turns out to be slanderous or confidential.

Will these types of tools take off?  I believe they will in time. While no HR manager wants to see flaming vitriol flowing through the company’s email system, business leaders want to know how people feel and that’s why practices like “management by walking around” are often so important.

Think about the challenges we have with information in companies. When people reach management or senior status in organizations, they start to get filtered information. In fact, the problem of “Groupthink” and “filtered news” is one of the biggest challenges many CEOs and other senior leaders face. While some leaders have “moles” in the organization who share information about what’s going on, even that communication channel is inconsistent and unpredictable. On the employee side, people always have reactions to things going on, but they ask themselves “should I say anything?”

The startup founders in this space believe, many passionately, that work will never be “good” until people can be open with their feedback and get managers to listen. Remember that Millennials (more than half the workforce today) grew up with instant feedback so they tend to see these apps as natural parts of their working life.

I talked with Christopher Mims from the Wall Street Journal about this a few months ago and he wrote an article called “Anonymous feedback tools for Bosses.”  It turns out many of these apps can be used to discuss almost anything: workplace safety issues, workflow inefficiencies, wasted time in meetings, and suggestions about food, benefits, or employee services. Ideally we should be getting a steady stream of this kind of feedback; we just need tools that can help us safely unleash the flow.

By the way, sentiment analysis technology is getting better. A recent article discusses how a consulting firm uses this technology to mine Starbucks’ Glassdoor ratings and found six common employee issues the company faces around the world.  Vendors like Kanjoya and Glint are building sentiment analysis right into theirs platforms, and it’s probable that this trend will continue.

Right now there are a variety of tools in this market, including BetterCompany.co, Memo (getthememo.com), Hyphen, Canary, Hinted – and many of those listed in category 1. Many of the pulse survey vendors now offer “open bulletin boards” and open text boxes that enable anonymous feedback, so they cross into this segment. And as sentiment analysis software becomes more and more ubiquitous, we can likely expect “open feedback” to become standard in feedback applications.

3.  Culture Assessment and Management Tools

The third category in this market are tools designed specifically to diagnose, monitor, or improve organizational culture.

As I described in Why Culture is the Most Important Topic in Business, Culture is a matching bookend to Engagement. A strong and consistent culture helps people perform well and it also can help organizations decide whom to hire, ways to assess leaders, and what leadership values they want to promote.

Culture is not “one size fits all.” Every company can have a different culture and still perform at its best. Culture vendors and culture tools have various models which show how culture varies, and some of the dimensions are simply decisions on how to run a business.

For example, one company may have a “risk-taking culture,” encouraging people to try new things, innovate, and often make mistakes in front of customers. This company may have many innovative, groundbreaking products, yet its customers may also know that some of its products are experiments and won’t always work the first time.

Another company may be a “fast follower” or “value deliverer,” who produces products which are highly tested, very reliable, but perhaps lower in cost and targeted toward customers who are more conservative in their desires. This company would not tolerate risky, early products in the market and as a result, its engineers, marketing, and product management team would be more conservative as well.

I won’t try to describe these tools in detail, but I see them as complementary to the tools above, because they provide evaluative models which assess personality traits and organizational behaviors that can help define culture, point out inconsistencies, and illustrate where culture is problematic. Many of these tools also include personality assessments (similar to Myers-Briggs), where individuals and managers can assess themselves, assess their teams, and gain insights and tips on how to better get along or “fit” into the company or team.

Some of the major tools in this category include RoundPegg, Culture IQ, Deloitte’s CulturePath, Human Synergistics, Kanjoya, Denison, and Ceridian’s new Related Matters, now part of LifeWorks.

Remember, Feedback can be applied to individuals, teams, or the organization as a whole. So tools that can assess individual personalities, as well as the many individual assessment tools, will likely cross into this area.

4. Social Recognition Tools

The fourth category is a big one:  tools that help people give others thanks, recognition, and even gifts (or points). While this is a slightly different category (many of these systems are really rewards points and rewards programs), it crosses into this market because whenever you give someone “thanks” you’re also providing feedback.

We studied this category a few years ago when we wrote Secrets of Effective Employee Recognition, a major research study that looked at these tools and their potential impact on business performance. What we found is that respondent companies that practiced a “high-recognition” culture have 30% lower voluntary turnover than average, and tend to outperform their peers in a variety of other metrics.

If feedback is the killer app, then “thanks” is the gorilla in the market. When you unleash the ability for people to easily say “thanks” to their peers (and give them points or other rewards), an enormous new network of information often starts to flow. Leaders can suddenly see important people who they may never have noticed, and the culture of helping others can start to grow and improve.

Our research also found that saying “thank you” is an important part of building strong employee engagement. Physiological studies show that thanking someone actually makes people feel better, through the release of Oxytocin, the “trust hormone.”  (Read this article for more detail.)

How do these fit into this market?  These systems help capture feedback, comments, can be tagged with company values, and produce another vast amount of information about how the organization works, who is performing well, and what types of relationships people have.  They are typically not anonymous, so they tend to focus more on positive comments than negative – but nevertheless, many companies tell me that these tools unleash enormous amounts of positive energy and can help people understand even better who and why certain behaviors and people are valued highly.

Vendors in this market include Achievers, GloboForce, iAppreciate (by OC Tanner), TemboSocial, Workstars, Kudos Now, and many more.

Is Feedback a Feature, An App, or a Platform?

As an analyst, I always wonder whether a new set of capabilities will become a market, a set of features, or simply a set of practices companies implement internally.

Why, for example, couldn’t I just use an off-the-shelf survey tool to do all this myself?

The answer is becoming clear: this is a complex new area of software and the right features and workflow dynamics are just being developed.

The new vendors in this space are rapidly going down the learning curve on how to design their tools, what questions to ask, and what kinds of feedback loops are going to work the best. So for the next few years I believe companies should look at this as a major new market to explore for HR and employee-related applications.

Consider how innovation often occurs in software. “Slack,” one of the fastest-growing software companies in the world of internal communications, is not just another version of a “chat room.” It offers a collaboration and messaging technology that aims to radically change the way we work. The company’s growth is occurring because it has learned how to simplify its tool, make it easy to use, and build an ecosystem of partners to make it better.

The feedback and culture vendors are doing exactly the same thing. They are inventing new user experiences, creating new workflows, and building new mechanics that facilitate feedback in exciting new ways. As the market grows and features become proven, more of this capability may larger HR systems, but I think it’s more likely these vendors will grow and later be acquired.  Companies like Medallia, for example, have built a robust business about customer experience management – we can expect a similar trend to take place in the area of employee feedback.

The larger HR vendors like Workday, SuccessFactors, Oracle, CornerstoneOnDemand, ADP, Saba, and Ceridian are also investing in these tools, but right now the startups are moving faster, and the real “Gorilla” of this space has yet to emerge.

A New Tool for Management has Arrived

Feedback is not just a fad, it’s a major trend.

These new tools have the potential to fill the gap between what managers need to do and what people really want. They give leaders immediate feedback on the programs and actions they take. They unleash new ideas, and open the door to new work practices, and help us engage our people.

But before you jump in, I have a warning. As you embark on this journey, get ready for some unfiltered information, be humble enough to listen, act on suggestions, and thank people for their input, regardless of its nature. And as a recent Wall Street Journal article points out, if you set rules for decency and confidentiality, people will respond.

The market is young, but it’s growing fast – I look forward to hearing your feedback on this important and rapidly growing marketplace.

This article was written by Josh Bersin from Forbes and was legally licensed through the NewsCred publisher network. Talent HQ is a premier information channel empowering professional development for recruiting and HR communities through regional events including Minnesota RecruitersWisconsin RecruitersFlorida Recruiters and California Recruiters.

About Jason Buss

Talent HQ’s creator and editor is Recruiting & Diversity Leader, Jason Buss. Talent HQ is a premier online news and information channel for the Recruiting and Human Resources community.

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  • Posted on: Thursday, September 3rd, 2015