We are finding in the early stages of our trial that the traffic light system is encouraging more conversation between appraisers/managers and appraisees. When being prompted by the system, people are more likely to tell the system that they are worried about whether they are going to hit a goal than they were previously (where they would have had to track down their manager and initiate the conversation). The result: more frequent conversations, and (hopefully) more goals going from orange to green rather than orange to red.
Appraisees are beginning to feed back that issues that they would have previously gone un-discussed (and would have caused them stress) are now being dealt with early.
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