Are Performance Reviews Actually Demotivating Employees?

ITA Group
ITA Group

manager and employee in a one-on-one performance review meeting

Before you begin planning performance reviews for your team members, it’s important to consider if what you’re doing is having the impact you want. The practice of assigning a grade or number to a person's performance is on its way out the door as the end result leads to greater demotivation than actual improvement. That’s why leaders need to explore more tactful feedback procedures that are useful to both their employees and the organization.

For managers, even the traditional evaluation process can be quite time-consuming. The research found that, on average, managers spend 17 hours per employee preparing for a performance review. That’s a ton of time to spend on a task that ultimately tends to demotivate employees while also triggering a fight or flight reflex in the brain that decreases subsequent performance.

Annual Reviews Alone Aren’t Enough

Traditional performance reviews, which usually feature a combination of self-appraisal and a face-to-face meeting with a manager, are in need of an update. While on paper it seems like a fair way to assess an employee’s performance, it likely won’t motivate them the way you want.

Sometimes, the appraisal reflects what the manager can remember—usually the most top of mind (read: recent) events. Appraisal can be based on opinions as real performance measurement takes a little more time and follow-up to do well. This results in demotivated employees who feel their manager doesn't care about them enough to take the time and facilitate their further career development or compensation adjustment.

According to one study, more than 60% of employees surveyed said they would move to a new employer that didn't have formal performance reviews, even if their pay and job level remained the same. As a team leader, if you don't evolve how you conduct performance evaluations your organization could have a hard time holding on to your employees.

Changing Feedback: Staying Engaged & Constructive

Continuous feedback is important for improving performance in the workforce today. Annual reviews were found to be especially tough on younger employees. According to an Adobe survey, more than one-third of millennials surveyed reported crying after a performance evaluation, while 47% said they’ve looked for another job after a review. Another 30% said they’ve quit a job because of a performance review.

Even if it’s hard to give and take criticism, it’s much harder for these groups to think they’re doing a good job, only then to be told after an entire year that their performance is actually sub-par. Ouch. Surprising employees with reviews like this is the fastest way to demotivate your workforce.

A new study reveals that perceptions of imposter syndrome (also known as “impostorism”) are quite common, with one in five of the college students in their sample suffered from very strong feelings of impostorism.

“We excel only when people who know us and care about us tell us what they experience and what they feel, and in particular when they see something within us that really works,” wrote Marcus Buckingham and Ashley Goodall in a recent HBR article.

Reviews & Recognition Should Go Hand-In-Hand

If your organization has a recognition program that is truly aligned with your company’s mission and values, you might be missing an opportunity to add additional relevant data to the annual performance conversation.

Leveraging data from a recognition program benefits both managers and employees. For example, many organizations recognize employees based on the company’s core values or brand behaviors. Employees can come to their annual review with hard evidence of when core values and brand behaviors were demonstrated. They can also show their understanding of these core values by providing evidence of recognizing others for exhibiting them.

Along with continuous feedback, coaching helps keep employees engaged and inspired while demonstrating support for leadership. Find out more along with how coaching can help with improving retention and developing future leaders in our post, Slam Dunk! How Great Coaching Improves Employee Engagement.