Performance Management Statistics

Performance Management Statistics image

Making sure employees know where they stand is vital to every successful company. Traditional ways of providing feedback to employees are not functional anymore. Nowadays, employees want specific, timely, and useful feedback that helps them improve and reach their potential. Both criticism and appraisals are important. Here are some crucial performance management statistics to help you build up a good feedback system and foster employee engagement.

Performance Management Statistics (Editor’s Choice)

  • 26% of employees ranked recognition at work as one of the top reasons to stay in the company. (AccessPerks)
  • 64% of employees believe that the quality of feedback they receive should improve. (OfficeVibe)
  • 69% of companies rely on annual or bi-annual performance reviews. (ClearCompany)
  • 19% of workers receive their feedback once a year. (SHRM)
  • 90% of performance reviews are ineffective. (Keka)
  • 95% of managers are dissatisfied with their traditional performance management. (TruQu)
  • 96% of employees consider regular feedback a positive thing. (OfficeVibe)
  • 81% of HR leaders are changing their performance management processes. (Gartner)

General Statistics on Performance Management

1. Only 5% of companies were happy with their performance management in the 1990s.

Poor company performance management and dissatisfaction with its practices are not new. Back in the 1990s, very few companies called their processes very satisfying. Another report from the same period showed that only three out of 10 workers agreed their company’s performance management improved their work somehow.


2. Traditional reviews decrease performance rates in over one-third of cases.

Since the beginning of the 21st century, performance management statistics demonstrate that feedback tends to produce negative, yet ignored, effects on employee performance in a significant number of cases. Although recent findings have confirmed that proper feedback improves performance, in over one-third of cases, it has had the opposite effect.


3. 32% of employees wait more than three months to receive the manager’s feedback.

It’s one of the crucial elements for career growth and improvement in the workplace. A lot of things depend on the manager’s performance appraisal, statistics indicate. Although most managers don’t enjoy giving feedback, employees usually love receiving it. Sometimes it even increases their engagement, stats show.


4. In the 21st century, a staggering four out of five US workers are unhappy with their annual reviews.

Despite the changes in business operations and human relations, this problem hasn’t been fixed yet, HR statistics indicate. Only 5% of organizations would mark their performance management with an A. Also, 78% of US workers would like to see changes in their job reviewing process. Finally, performance management statistics show that 45% of HR leaders think the existing reviews aren’t a good measure of workers’ performance.


5. 26% of employees ranked recognition at work as one of the top three factors to remain with the employer.

On the other hand, 17% claimed that their manager was horrible and failed to recognize their efforts. Finally, a large number (43%) ranked their managers as simply okay.


Employee-Employer Relations

6. 22% of workers opted to call in sick rather than go through a performance review.

Among 1,000 surveyed Millennials, nearly a quarter preferred to call in sick, thus escaping the rigid performance review, statistics suggest. This is opposite to the ultimate goal of performance evaluation. The evaluation should encourage people to express and accept criticism and appraisal willingly. Instead, it has become an event all employees dread.


7. Around 63% of employees feel their employers don’t praise them enough.

The true value of performance management lies both in criticism aimed at correcting employees’ wrong decisions and praising them. However, studies have shown that many don’t feel appreciated enough. In fact, it’s the number one reason for people to leave their jobs, as employee retention statistics indicate.


8. 64% of employees believe that the quality of feedback should improve.

Based on the employees’ opinions, managers need to work more on providing quality performance management feedback. According to performance management statistics, when asked if their employees acted on the feedback they received, 22% of them said no. Still, 50% answered yes, while 28% believe they haven’t acted on it consistently.


9. 30% of employees don’t feel valued by their managers.

The feedback that reflects an appreciation for employees is crucial to making them feel well and engaged. According to performance management statistics, 46% of workers feel moderately valued by their managers, and 53% feel the same about their colleagues. On the other hand, 30% feel “not at all” or “not very valued” by their superiors, while 26% feel the same about their colleagues. As a result, all this affects their engagement.


10. 21.5% of employees that didn't feel recognized interviewed for a new job in the last three months.

When recognition and appreciation don’t follow employees’ achievements, it’s more likely that they will look for another job. The validation they constantly seek is tightly intertwined with their sense of loyalty. Unlike the above percentage, 12.4% of workers feel recognized at work.


11. 69% of companies rely on annual or bi-annual performance reviews.

Based on statistics on performance management, many companies still work with old, outdated systems. Therefore, a new strategy in this domain is a must-have. While most still rely on these models, over half of the office professionals would like to see performance checks at least once a month. What is more, 94% of employees would welcome real-time comments on issues they need to change.


12. 19% of workers receive their feedback once a year.

Recent research has shown some worrying facts. 19% of workers receive feedback once a year, while only 28% get it several times a year. Further, 27% have their performance evaluation a few times a month, while 19% have it a few times a week. Only 7% have continuous performance management or daily reviews, according to performance management statistics.


Distribution of Employees That Receive Feedback From Their Managers by Frequency

13. 58% of companies use spreadsheets, among other things, to track their performance.

Many companies spend hours devising project and budget plans. Yet, they also use spreadsheets to evaluate their employees’ performance. Despite their popularity, they are a poor business planning and performance management tool, especially given the ample palette of solutions for different business needs.


14. 50% of employees were taken by surprise with their ratings.

According to performance review statistics, half of the surveyed employees didn’t expect the ratings they got. Among these, 87% felt negative about them. As a result, their engagement dropped by 23%, although they were good performers. That’s why there are many issues against managers having to rate employees on a scale of one to five.

(Inside HR)

15. Only 12% of employees would leave an organization for a higher paycheck.

As performance management statistics reveal, engaged employees are less likely to leave a company. Hence, it’s important to look after them financially and ensure they get appraised for well-done tasks and receive feedback to improve things. Despite 89% of employers thinking their employees would leave for a better package, most employees prefer receiving feedback and recognition. Therefore, a good combination of employee engagement software and a performance management system could be of great use.


16. 24% of employees would quit because of inappropriate performance reviews.

Judging by these performance stats, a quarter of workers are ready to leave their company, making every HR department stop and think. That’s why there is a need to improve outdated performance management programs to prevent turnover. Using different tools and tactics could significantly change this situation.


17. Two-thirds of HR professionals rated their organization 6.1 on a scale of 1-10 for having a supportive feedback system in place.

When it comes to company performance management, most HR leaders consider their organization successful at providing an environment for supportive feedback. So the rating of 6.1 on a scale up to 10 is quite high.


Performance Management Challenges

18. 90% of performance reviews are ineffective.

Recent studies and performance statistics indicate that most reviews turn out to be more painful than effective. It’s so because they focus primarily on recent happenings and criticism. Therefore, they damage employees' self-worth and confidence at work. It's even worse if the feedback is conducted by people who do not communicate much with employees. In fact, it might produce more harm than good.


20. 51% of workers think their annual performance reviews are inaccurate.

Most traditional reviews cover a time between six months and a year. Usually, they are ineffective because it’s hard to squeeze in the whole period in a single review. That’s why this kind of performance management feedback tends to be biased and pretty inaccurate. At the same time, it demotivates employees.


21. 95% of managers are dissatisfied with their traditional performance management.

Based on performance management software statistics, almost all managers in HR feel unhappy about their current management tools. At least, that’s what CEB’s research indicates. These solutions, in their opinion, need major improvement. However, some of the new HR software solutions have a lot of enhancements that might help solve this problem.


22. Managers spend an average of 210 hours per year conducting performance management activities.

Statistics on performance management have indicated that one of the serious drawbacks of current performance management processes is that they are time-consuming. Time management statistics show that employees spend around 40 hours per year on these activities. In turn, managers spend about five times as much. Deloitte's recent research has found that their 244,000 employees spend over 2 million hours per year on performance reviews. Hence, the impact of performance management on employee engagement couldn’t be more ineffective.


23. A company with around 10,000 employees spends $35 million annually on reviews.

It’s not only the time companies and managers spend conducting performance management reviews; there are actual costs, too, as feedback statistics show. Considering how much companies with 10,000 employees spend on these processes, it’s hard to imagine how much more large tech giants, such as Microsoft or Deloitte, spend. Therefore, many of them (Expedia, Adobe, and even Microsoft) have stopped conducting performance management based on performance reviews.


24. Only 42% of workers trust their managers.

A survey from Harvard Business Review confirms that less than half (42%) of the participants trust their bosses, while 58% trust strangers. This reveals a serious communication gap in corporate culture that leads to other performance management challenges. This relation urgently needs fixing to prevent the high price it comes with — disengagement, loss of productivity, and turnover.


25. Around 50% of employees’ evaluations are 30 or more days late.

Feedback statistics show that many managers struggle to deliver reviews on time due to the parts that take a long time to process. This is particularly true for organizations that perform the assessment only once a year.


26. Two-thirds of performance management systems don’t recognize high performers.

Recent research describes the unpleasant dynamic between a manager and an employee at a performance review as one person being the judge and jury to the other, which creates problems. In fact, employees get more defensive, and it leads to poor performance, even for high-performers. In addition, the obtained individual’s rating often doesn’t correspond to the actual business results, as performance statistics have demonstrated.

(ShortLister, SHRM)

Performance Management - Best Practices

27. 80% of employees would rather have immediate feedback than annual reviews.

An Adobe-conducted study has shown that annual reviews are obsolete. Moreover, they take too much time. Feedback stats show that employees feel much better about an immediate appraisal or criticism. They believe it does them more good and improves their overall performance and productivity.


28. 96% of employees consider regular feedback as a positive thing.

Almost all surveyed employees welcome continuous performance management. Since reviews focus on changing employees’ behavior at work, it’s always better to give feedback on a particular behavior or action closer to the actual time of happening.


29. Managers influence about 70% of employee engagement variance.

According to performance management statistics, employees who communicate regularly with their managers are three times more engaged than others. In fact, 43% of most engaged employees get feedback weekly. Hence, the more frequent the reviews are, the better the results. In fact, nothing can increase employee engagement and productivity as positive reviews.


30. Managers who receive positive feedback demonstrate an 8.9% increase in profitability.

According to performance stats, people who know their strengths and use them accordingly become better performers. For example, in a study of about 65,000 people, Gallup confirmed that employees who receive feedback on their strengths and their companies have 14.9% lower turnover rates. Similarly, business teams with managers who receive strengths feedback register a 12.5% increase in productivity.


31. Roughly 68% of people who received accurate and continuous feedback claim they felt fulfilled at their job.

As evidenced by the companies with the best performance management practices, if employees receive continuous and precise feedback, they are happier at work. According to performance management statistics, Millennials, among all generations, feel most fulfilled if their feedback is accurate and consistent. Namely, 72% of those from this age group who have received such feedback think their job is fulfilling.


32. Companies with ongoing, real-time performance management programs register 39% better talent acquisition.

In a highly competitive job market, attracting and retaining talent is vital. A lot is directly connected to feedback, stats confirm. A company that supports a continuous performance evaluation system is nearly 40% better at attracting top talent and 44% better at talent retention.


33. 65% of employees want more clearly defined roles and responsibilities.

Many HR departments have problems establishing an integrated people strategy. They need to leverage the right talent analytics to make informed decisions about the size and shape of the organization and its performance management, statistics indicate. On the other hand, only one-third of companies have insights into the business impact of the current people strategies.


34. For 92% of surveyed employees, negative feedback, if delivered right, improves performance.

Most participants in a recent survey welcome negative performance management feedback. However, it has to be delivered appropriately. Usually, people who find it hard to receive negative feedback have problems giving one. Yet, those who rated their managers high for their honest feedback are the ones who prefer receiving corrective reviews, performance management statistics show.


35. About 70% of companies believe in a closer connection between performance management and other talent issues.

Taking into account the performance of employees throughout the year should be crucial for making other decisions regarding talent. However, this can be done with more precision by installing an adequate performance management system.


Performance Management Trends

36. 81% of HR leaders are changing their performance management processes.

According to the 2019 Gartner Performance Management Benchmarking Survey, most HR leaders are a long way toward changing the systems in this domain. Some companies with the best performance management practices have accepted these methods. One of the crucial changes — already adopted by some companies is the elimination of the numeric or qualitative labels used in grading employees.


37. One-third of US companies have abandoned the traditional performance management systems.

Although the idea of abandoning old appraisal processes might have been scary at first, now, a significant portion of American firms are doing just that. Performance statistics indicate that companies across the nation are switching from annual reviews to more frequent and informal check-ins between superiors and subordinates. And it’s working.


38. Some 6% of the Fortune 500 companies got rid of the rankings systems.

Accenture has recently joined a small list of top companies that have decided to exclude forced rankings and time-consuming paperwork from employee review processes, statistics on performance management reveal. Instead, they have opted for performance management without ratings. Based on their research, the money and efforts spent on the old processes weren’t even close to accomplishing the main goal — better performance.

(The Washington Post)

39. 80% of Gen Y prefer on-the-spot recognition of their action.

Some performance management best practices applied to Gen Y consist of direct feedback rather than a formal review process. Workers of other generations probably want this kind of feedback too, but mostly Gen Y has the ‘audacity’ to ask for it. They feel it makes them understand the job better and develop faster, performance management statistics reveal.


40. 74% of Millennials felt in the dark about their performance.

Most Millennials feel like their boss or peers keep them in the dark about how well they are performing. On the other hand, 47% state that receiving a performance review makes them feel incapable of doing anything right. Finally, 62% have felt ‘blindsided’ by their performance feedback.


41. Organizations with continuous performance management practices outperform their competition by 24%.

Statistics on performance management show that providing feedback on an ongoing basis works much better financially for an organization. Typically, these organizations outperform their competition by a lot. For example, the findings from Deloitte point out that companies with effective performance systems do 92 times better finance-wise than the rest.


The Conclusion

Despite the fact that sometimes performance ratings aren’t what employees want to hear, they matter. Ratings distinguish top performers from the rest and help employees correct their mistakes on the way to achieving better results. Who knows, maybe they could even become A performers at some point. Although this process might be time-consuming, every company should have an adequate model of performance management, statistics above confirm. Because effective feedback, if done correctly, carries benefits to all parties.

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