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Traditional performance review stats 2020

10 traditional performance review stats that may (or may not) surprise you

Reading Time: 5 minutes

It’s no secret that traditional performance reviews aren’t exactly popular. 

Employees dislike (often hate) them, managers can often struggle to give them and leadership usually sees very little tangible benefit or outcome to them according to Gallup. Yet they still permeate our work lives, cropping up every 3, 6 or 12 months typically. 

However, a lot of businesses are starting to shift away from old-fashioned traditional appraisals by varying degrees (amen!). The idea that they’re not exactly up to scratch is basically common knowledge at this point, but even so, the actual figures for how unpopular and ineffective they can be are pretty shocking. 

So here are 10 surprising statistics about traditional performance reviews!

Over a third of employees want more feedback outside of traditional performance reviews

More than 33% of workers still want more regular feedback, according to a survey by Joblist of over 1000 full-time employees. This shows that despite the aversion many people have to annual reviews, employees do still want critical guidance. The fact is that feedback needs to be given in a timely manner to actually be effective. Managers need to look at streamlining their appraisal process and making feedback more frequent to meet employee demand.

Traditional performance reviews aren’t useful, according to 74% of UK employees

A YouGov survey of over 800 UK workers found that only 26% rated their performance reviews as useful. The survey studied the levels of association that respondents had between different words and their performance appraisal. The two most commonly associated terms were “time-consuming” and “pointless” at 39%.

The problem with traditional performance reviews is the build-up, combined with the ambiguity. That’s why we suggest supplementing or all-together replacing your annual review with a regular check-in.

Significantly less than half of employees trust their managers

A study by Harvard Business Review shows that only 42% of employees trust their boss, whereas 58% would trust a stranger. Workplace trust is incredibly important, and it can be difficult to build up with infrequent traditional performance reviews. Building up trust in the workplace requires you to make use of effective, consistent two-way feedback that just isn’t feasible using traditional performance reviews.

Traditional performance review stats: scrap the old and embrace the new for more effective performance reviews
Personal, two-way, frequent feedback has to be the cornerstone of great reviews

Traditional performance reviews can cost large organisations over $30 million

Gallup is a fantastic resource for understanding performance management. According to them, having a traditional performance review can cost between $2.4 million and $35 million per 10,000 employees. Aside from the direct costs of an annual review, this also stems from the volume of HR hours required to effectively implement it and process the results. One major advantage that modern performance appraisal platforms like Weekly10’s services is that they tend to be much more cost-effective.

More regular feedback nearly triples the likelihood of engagement

That Gallup article also highlights the fact that employees who receive weekly feedback are 2.7 times more likely to be engaged at work. This is because effective performance management systems should facilitate ‘frequent, meaningful manager-employee conversations’, which is Gallup’s way of saying effective two-way feedback.

It also made employees five times more likely to agree they receive meaningful feedback

The same Gallup study of weekly versus annual feedback also found that weekly feedback made employees 5.2 times more likely to strongly agree that they ‘receive meaningful feedback’. On top of that, they were over three times more likely to strongly agree that they were ‘motivated to do outstanding work’.

Only 5% of managers are satisfied with annual performance reviews

Research by CEB found that the vast majority of managers aren’t satisfied with the quality of traditional performance reviews. On top of that, only 10% of HR leaders found them to be effective. Interestingly enough, research by the Society of Human Resource Management found respondents on the employee side reporting similar responses at identical rates.

80% of businesses are still using traditional performance reviews to some degree

However, despite this widespread dissatisfaction, SHRM’s research has also found that four fifths of businesses are still utilising traditional performance reviews to some degree. It’s worth noting, however, that this percentage is slowly falling over time. While many managers and HR leaders are moving away from annual reviews, they have been ingrained into workplace culture for a very long time. 

Traditional performance review stats: you can't always rely on your managers organisational skills.
Sometimes a manager’s organisational skills aren’t ideal.

24% of employees would consider quitting due to inadequate performance feedback

Around a quarter of your staff preparing to leave isn’t something to be ignored. This is another way the shortcomings of traditional performance reviews can damage your business. Communicating with staff regularly is vital for keeping turnover as low as possible.

It’s for this reason that we’d recommend implementing a regular check-in as a means of reducing staff turnover. Our check-ins allow managers to monitor everything from wellbeing to day-to-day engagement. One of the best things managers can do in these check-ins is to emphasise personal development. According to previous Gallup research, 32% of surveyed employees who had recently quit their jobs did so due to lack of promotional opportunities as their reason.

Performance management systems meeting these criteria are more likely to be seen as fair

This statistic is a bit difficult to cram into a subheading. Basically, McKinsey have established three criteria for an effective performance management system. These are:

  • Goals linked to business priorities.
  • Effective coaching by managers.
  • Differentiated compensation.

According to McKinsey, businesses whose performance review frameworks meet these three criteria are far more likely to be perceived as fair by employees. 84% of respondents whose organisations met all three criteria reported a positive impact on performance management, and were twelve times more likely to report effective performance management than respondents whose organisations didn’t meet any.

So what does an effective performance review look like? 

Traditional reviews have issues, we’ve covered that already. But that’s not to say a tweak here and there can’t turn the tables on how useful performance reviews can be. 

A review needs to be built on a body of evidence. Ideally, evidence collected through a continuous approach towards performance management, utilising say an employee check-in such as Weekly10. 

Evidence removes the guesswork, the “as I remember it”s and shifts the focus of any review or 1:1 on the real actions, achievement, blockers, challenges and successes of your people. This keeps things focussed and accurate, relevant and impactful. 

A continuous performance management approach also means not just waiting for the review to roll around before issues are tackled or successes are cheered. We know that interventions and feedback are more effective the closer to an event (action, behaviour etc.) occurs, so a frequent employee check-in is key in delivering impactful change. 

Want to know more about Weekly10 and how our weekly check-in is revolutionising the traditional performance review? Check out a demo today!

See how a focus on regular feedback and continuous (but simple) performance management can change your reviews forever.

Head of People Science