We’ve said it before and we’ll say it again: the ways that companies have typically managed employee performance 👏 just 👏 aren’t 👏 working. It’s time to seriously rethink performance management and focus on performance enablement instead.
But it’s also critical to look at why those outdated performance methods aren’t serving companies or their employees so we understand exactly what’s missing—and what the newer forms of performance enablement can add. Here are the ten most revealing performance management statistics you need to know.
Also check out: Cost of Performance Management Calculator
Performance management by the numbers
1. Fewer than 20% of employees feel inspired by their reviews
Let’s start with a pretty clear statement about the current state of performance management: less than a fifth of employees find their performance reviews inspiring, according to research from SHRM and Gallup.
The whole purpose of performance management is right there in the same: managing. But that’s not a very motivating way to look at employee performance, and it’s certainly not inspiring employees to go above and beyond and perform at their best.
2. 95% of managers are dissatisfied with their company’s performance review system
It’s not just employees who find performance reviews in a traditional performance management system unhelpful at best (and damaging at worst): this data from a Gallup study finds that nearly all managers agree. And managers aren’t alone: only 1 in 4 companies said their performance management systems are effective.
3. Women get 22% more personality feedback than men
One big issue with current performance management is that it’s often not fair, impartial, or even actionable. Research from Textio found that women get 22% more feedback based on their personality than men do, like being called abrasive or opinionated.
The same study found further disparities in how people receive feedback in the workplace: Black and Latinx people receive 2.4 times more feedback that is not actionable than white and Asian people do, and people over 40 are three times more likely to be described as unselfish than younger workers.
This pretty patent lack of fairness and objectivity doesn’t inspire employees to go above and beyond—sometimes it just inspires them to quit.
4. 3 in 4 Gen Z employees will resign if they don’t get feedback
And quit they will, if they’re not given any sort of guidance on how they’re performing. Recent research shows that younger workers are so serious about receiving regular feedback that 73% say they’re more likely to quit if they don’t receive frequent feedback and communication from their managers. Older generations aren’t as adamant, but more than half of them agree with Gen Z here.
And while younger workers are often negatively described as more demanding, you know what? Getting frequent feedback and communication from your manager is a pretty essential element of success for people who are newer to the workforce. Gen Z is in the right here 👏.
5. Only 21% of employees feel their performance metrics are within their control
Gallup research shows that employees aren’t motivated by their performance reviews often because they simply don’t get evaluated on what they can control. This might include company-wide results at a large organization, the results of a team or department project they weren’t attached to, or some other goal set without their specific role in mind.
Since the results of those metrics are out of their hands, it’s difficult for employees to feel a genuine sense of accountability or accomplishment, and to feel motivated to improve (improve on what, they might reasonably wonder).
6. Employees are 3.6 times more motivated when they get daily (instead of annual) feedback
Feedback must be frequent to be effective: Gallup research shows that daily feedback significantly increases employee motivation. Frequent feedback demonstrates to employees that their managers are paying attention and recognizing what they’re doing every day, and that kind of careful, positive attention is very meaningful.
It also offers employees a chance to course-correct in real-time if a negative behavior is holding them back, and lets them hone in on their strengths much quicker than if they only hear about them in their annual review.
7. 47% of employees receive feedback only a few times a year—or less
However, most employees aren’t getting this valuable daily feedback—not even close. 28% of employees only receive feedback from their managers a few times per year, and 19% receive it once a year or less. That’s almost half of the workforce not getting nearly enough feedback to motivate and engage them.
Can you imagine if you were a professional runner who ran every single weekday, but you never got to look at data on your speed and pacing, or where you stood in relation to other runners? Then once per year you were thrown into a gigantic arena with every other runner in your area, and this single race determined your pay for the upcoming year. Sounds pretty confusing, doesn’t it? But that’s how many companies and managers are still treating their employees.
8. Performance reviews actually make performance worse more than one-third of the time
That’s not a typo or a rounding error: it’s accurate, and there are a variety of reasons behind it like poorly trained managers and legal considerations. Gallup research that cites this pretty stunning statistic from the American Psychological Association also notes that these performance reviews are expensive—costing an organization with 10,000 employees anywhere from $2.4 million to $35 million a year in lost working hours. So, many companies are losing productivity on an activity that… also worsens performance. Whew! What a combo.
9. 60% of companies who say they have an effective performance management system outperform their peers
Now onto some more positive stats to round out this guide. When done effectively, performance management and enablement give companies a significant competitive advantage (probably because so many companies are doing it poorly). McKinsey research found that companies with strong performance management strategies say they perform at a higher level than others in their industry—almost three times higher than companies who say their performance management is ineffective.
10. 63% of remote workers who receive feedback a few times a week from their managers are engaged
This Gallup research compares those engaged remote workers to those who only receive feedback a few times a year: only 31% are engaged (and only 19% of those who receive feedback once a year or less).
Similar gains apply to hybrid workers as well: 57% of those who receive feedback a few times a week are engaged, vs. just 20% who receive feedback only a few times a year, and 10% who receive it less than once per year. This data illustrates the importance of feedback in engaging employees who aren’t in the office full-time, which these days is potentially quite a lot of your workforce.
Takeaways
The current state of performance management isn’t great. With gaps in fairness and equality, a lack of training for many managers in handling these conversations, and infrequent feedback as the norm, we’ve got a long way to go to make these performance conversations more regular and more motivating.
Fortunately, you can start giving employees more frequent feedback, including positive recognition, today. The answer? Focus on enabling performance, not managing it. Plus, with Bonusly’s employee recognition and feedback platform, your company can create a strong culture of recognition all year round and start reaping the benefits of frequent feedback.
