from an article in Wired by Thomas Goetz, How Facebook Uses Feedback Loops: Meet Rypple.

How does Facebook keep its employees happy? Feedback. Lots and lots of feedback.

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“Workplace productivity has been stuck to a 50-year-old, paper-based performance-review cycle,” says Daniel Debow, Rypple’s co-founder and co-CEO.

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“Our company has always been built around feedback loops,” says Facebook engineering director Bob Trahan, who counts himself as employee 45. “Everything we do in engineering is reviewed: Engineer A reviews what Engineer B does. We have design reviews twice a week. We track performance metrics for code, in terms of speed and time.”

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The whole process of managing employee performance and providing feedback has been in need of an overhaul for some time. The 360-degree review was popularized in the 1990s
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“three-sixties” have many limitations, the biggest of which is that they typically happen only once a year.

In 2000, Jai Ghorpade, a professor of management at San Diego State University, conducted a review of more than 600 employee feedback studies, only 30 percent of which showed improvements in employee performance. Another 30 percent reported decreases in employee performance after a feedback review, and the rest reported no impact at all. “While it delivers valuable feedback, the 360-degree concept has serious problems relating to effectiveness,” Ghorpade concluded.