Last week JP Morgan Chase took a giant step forward. Not in banking but in employee relations.

It announced the company is developing a new feedback tool, Insight360. The software will allow employees to rate each other, and their performance, in real-time.

But JP Morgan is not alone. They’re one of an increasing band of companies adopting real-time feedback systems. Some of the earliest adopters were the tech companies, like Amazon, and Goldman Sachs is experimenting with online feedback too.

Yet, contrary to popular belief, these systems have been largely welcomed by employees. In fact, for JP Morgan, it was the staff who requested it, suggesting that millennial employees really do like to know where they stand 24/7.

Employers need to remember it’s quality and not quantity that really matters

But, while real-time feedback software presents huge opportunities for both companies and staff, we need to stop ourselves falling into the trap of ‘more is always better’. It just isn’t.

Companies and people-managers are generally attracted to the idea that more feedback is better. Surely, the more information we have on our employees, the better the organisation will be.

But feedback is not an end in itself. Feedback is just data. It’s what you and your employees do with it that counts.

The whole purpose of feedback is to improve the performance of people.  And we want them to improve so that the company can reach its goals. So feedback must do more than just count – it must give employees a sense of what they’re doing wrong – and right – over time; help them learn and empower them to make changes to the way they go about their business for the good of the company.  

Real-time feedback is great, but if we’re not careful we could end up just creating more and more useless data. So much data that HR leaders, managers, and employees simply end up drowning – and none the wiser for it.

We need to help and encourage people to give good feedback

Feedback is all about quality, not just quantity. To fight off the data overload we need to ensure that our systems are creating useful, relevant, rich feedback – stuff that people can act on.

We need to design our feedback systems so that they encourage people to give good quality feedback if they want others to improve. This doesn’t necessarily come naturally. To many people ‘feedback’ can just mean a score out of 10, or a stinging attack.

People must be encouraged to give mixed feedback on systems that allow the blending of both raw numerical scores and richer detail in text. On their own, numerical rankings can damage employee morale, and, more importantly yet, don’t give employees the information they need on how to improve their performance in the future. Why did they receive a low score? What can they do to improve or change?

Good feedback is also constructive. No one responds positively to constant negativity. That’s the quick way to lose people with great potential. In fact, research shows that employees need 5-6 pieces of positive feedback for every negative comment.

As a result, online feedback tools need to encourage employees to point out the positives, as well as the negatives, of their colleagues. That might mean, for example, forcing or prompting users to phrase negative comments in the form of constructive ‘suggestions for improvement’. Or giving a number of positive comments for every negative.

Empowering employees to manage their feedback in order to improve

We also need to make sure that our feedback systems are empowering employees to interact, manage, and respond to the feedback they receive. New real-time systems are useless if they don’t encourage employees to react to their feedback positively and constructively.

Feedback is often at its most effective when it is anonymous. Anonymity allows people to share their views openly and freely, without fear of hurting relationships with their colleagues. But this candid approach can also be damaging, especially if the feedback is shared openly with colleagues and managers. Employees can end up feeling demoralized; concerned that the rest of the team is judging them. At worse, they can disengage; tell the team that they think the feedback system is useless to save face.

Encouraging people to give constructive feedback is only half of the solution. Our systems also need to give employees total control over who can see their feedback; even stopping their managers seeing the data if they want to. If it stays private, the employee is less likely to react negatively, feel hurt and sensitive, and more likely to take the feedback fully on board.

In the longer term, employees should be encouraged to be more transparent about the feedback they’ve received, sharing only what they feel comfortable with. But this process must be taken slowly, and managers must remain sensitive to how employees may feel about the feedback at all times.

The 24/7-feedback revolution has been with us for a few years now. For many HR managers, it’s old news. JP Morgan is only the latest company to jump on board.

But, as the spotlight is starting to turn its way, we need to make sure that companies are getting it right. Real-time data is useful, but it has to be the right type of real-time data. It has to be rich, contextual, and constructive. Companies need to concentrate on quality feedback, as well as its quantity.

Ab Banerjee is CEO of ViewsHub.