The recent shift in the market has put some spotlight on performance management as a way of improving businesses. Moreover, performance management statistics have shown that the change also gave more prominence to mental health and healthy working environments.
Performance management has a few core aspects — while reviewing (usually annual) is the most common practice, this system also includes setting individual and group goals and various performance improvement plans. Let’s check some interesting figures that shed light on the current state of performance management.
Performance Management Statistics (Editor’s Choice)
- 85% of workers who receive weekly feedback are more engaged.
- 63% of companies still rely on annual employee evaluations.
- 74% of Millennial workers think they aren’t receiving enough feedback.
- 55% of employees say yearly reviews don’t improve their performance.
- Nine out of 10 managers are dissatisfied with the annual performance evaluation.
- 10% of Fortune 500 companies have stopped using the traditional review method.
- Companies spend up to $35 million on annual assessments.
- 32% of employees don’t receive feedback for at least three months.
Statistics on Performance Management for 2022
1. 85% of employees who receive weekly performance reviews are more engaged.
(SHRM)
Many companies have recently considered abandoning annual performance reviews to increase workplace engagement. According to a survey, 85% of workers say they are much more engaged at their jobs because of weekly check-ins with their managers. On the other hand, only 2% who receive feedback every week state they are disengaged.
2. 63% of companies still give annual performance feedback.
(PR Daily)
A 2021 survey on 344 US companies found that 63% of employers continue to utilize annual feedback as a performance management method.
The survey’s performance management statistics also show that 18% of businesses have adopted a biannual review system, while 8% do quarterly evaluations. However, only 1% make an effort to evaluate their workers every month.
3. The focus on employee development has dropped by 16%.
(Clear Review)
The 2022 Clear Review’s report reveals that 65% of companies didn’t place performance management as one of their top priorities in 2021. Performance management trends indicate that 47% of businesses focused on employee development in 2021. However, the percentage dropped to 31% in 2022.
On the bright side, the focus on engagement and productivity is increasing — 48% of companies claim they are paying attention to these aspects in 2022, while only 33% claimed the same the year before.
4. 84% of managers agree burnout needs to be addressed through performance management.
(Clear Review)
According to performance statistics, most business managers recognize burnout as a critical problem within their companies and are actively engaged in solving it. For example, 97% of managers say they can somewhat single out stressed employees, while 87% believe they can support a worker experiencing burnout.
On the other hand, only 52% of workers confirm managers help them avoid burnout at the workplace. What’s more, performance stats show that 51% of the respondents say they would switch or strongly consider switching to a company that better supports employees suffering from burnout.
5. 47% of HR cite turnover as one of the top performance management challenges.
(SHRM)
Employee turnover and retention are some of the most difficult parts of performance management for HR managers. They claim implementing employee recognition positively affects the workforce and the environment. Statistics seem to reflect this, as recruitment improves by 56% and retention by 68% with this program.
Performance Review Statistics & Millennials
6. 80% of Millennials state they prefer immediate over periodical feedback.
(Achievers and Experience Inc., Gallup)
Young workers say that getting immediate feedback on what you are doing is very helpful. Many believe that understanding what needs to be done right away works much better for them than focusing on mistakes or achievements from months ago.
Unfortunately, according to feedback stats, only 19% state they get feedback continuously, and 17% say they receive meaningful feedback.
7. 74% of Millennials feel like they aren’t getting enough performance feedback.
(Trinet)
A Trinet’s survey found that 74% of the Millennial generation in the workforce feel their employers and co-workers don’t give them sufficient feedback. Also, 62% of the respondents have said that the performance reviews have blindsided them at least once. Finally, 47% claim the feedback has made them feel unable to do anything properly.
8. 40% of Millennials feel the performance feedback they receive is vague.
(Trinet)
Leaving the current evaluation system as it is might result in many young workers quitting their jobs. Performance appraisal statistics show that two out of five Millennials would like their managers’ feedback to be more specific. Moreover, 32% state they want to be able to share their opinions on their work with others, while 31% feel the feedback they receive is biased.
9. 73% of Millennial managers say the old feedback system disrupts their other tasks.
(Adobe)
Estimates say that Millennials will make for about 75% of the general workforce by 2035, shifting the established performance management trends in the process.
According to an Adobe study, most Gen Y managers have said the process of making annual performance management feedback obstructs their other work tasks. What’s more, 68% claim the feedback produces no significant results.
10. Traditional performance reviews have caused negative reactions in 57% of Millennials.
(Trinet)
The Millennial generation doesn’t seem too fond of the traditional performance management system. Many see flaws in how their workplaces provide feedback and state that more frequent reviews would be beneficial. For example, 35% of Millennials with adverse reactions have complained to their peers, while 28% have started looking for a new job.
Traditional Performance Management Statistics
11. 5% of employees claim traditional reviews don’t improve their performance.
(Workhuman)
Annual reviews are one of the biggest performance management challenges for managers — they are costly and take a lot of time. Moreover, a Workhuman report has found that 55% of workers say annual reviews haven’t helped them improve. This is probably because the data from a year ago can rarely help improve an employee’s current performance.
12. Nine out of 10 managers aren’t satisfied with the traditional approach.
(SHRM)
Most managers and HR staff might soon abandon the annual feedback system. According to CEB’s performance appraisal statistics, nine out of 10 HR leaders think annual appraisals are inaccurate. In addition, the same number of managers are dissatisfied with how their companies conduct annual reviews.
Another survey shows this method can also be time-consuming, as managers spend an average of 210 hours per year only on performance management tasks.
13. 10% of Fortune 500 companies have abandoned the annual review method.
(Washington Post)
Another flaw in the traditional performance management approach seems to be the employee rating system. According to performance management statistics, only one in 10 Fortune 500 Companies has stopped using this method. One of the first companies to do so in 2012 was Adobe, with Gap and Microsoft following suit soon after.
14. 79% of executives rank performance management redesign as a top priority.
(Deloitte)
Shifts in companies regarding performance management methods are gaining momentum: performance review statistics show that 79% of executives think their review system needs an overhaul, while 38% describe it as “very important.”
As a result, businesses are adopting various tools and approaches to improve their employee review systems. These include continuous feedback, new reward and evaluation models, regular check-ins, agile goal management, etc.
15. Annual performance reviews cost companies up to $35 million per 10,000 employees.
(Gallup)
According to Gallup’s performance management statistics, companies spend $2.4–$35 million per 10,000 employees on annual reviews. The amount includes the direct costs of this system and the number of hours HR managers spend on the whole process.
However, the same report says that a simple switch to a continuous performance management system won’t do: organizations must train first managers to give regular feedback properly if they want the new approach to be cost-effective. One way of doing this is providing managers with role-play sessions where they can learn how to handle manager-employee check-ins.
Continuous Feedback Statistics
16. The number of employees who prefer monthly feedback increased by 89% in 2020.
(Reflektive)
The most recent Reflektive report shows that the expectations of employees, HR professionals, and business leaders don’t differ much. The number of workers who want to receive feedback monthly or more often increased by 89% in 2020 over two years. On the other hand, there has been a 170% increase in business leaders and HR executives who expect managers to provide daily feedback to their reports.
17. 62% of employees state they would like to receive more feedback from their co-workers.
(Officevibe)
Employee performance statistics show that 62% of workers would like to hear feedback from their colleagues, apart from their managers. Therefore, companies should strive to create an environment where co-workers can give each other feedback naturally. This can provide workers with a sense of belonging and a more unified view of the company’s mission.
18. 32% of workers wait for feedback for more than three months.
(Officevibe)
Feedback statistics reveal that 96% of the workforce consider feedback the most important tool for growth. Regular reviews are essential because they allow for constant input about possible improvements. However, according to statistics, 32% of employees report waiting on reviews for over three months.
19. 60% of workers would like to receive feedback daily or weekly.
(PwC)
A PwC survey shows that more frequent performance reviews bring better results. For example, 60% of the respondents would like to receive feedback at least every week, while 72% of people over 30 say the same. In addition, as per feedback stats, 75% of respondents value feedback at work.
20. 97% of Gen Z prefers continuous feedback.
(PR Newswire)
An overwhelming majority of Gen Z seems to respond well to frequent feedback. Moreover, since many are afraid to make a mistake, they state that receiving reviews regularly is a great way to learn how to improve your skills. For example, 80% think accepting errors helps them be more innovative, while 17% believe mistakes help them take on risks again.
Performance Management Statistics — The Bottom Line
The impact of performance management on employee engagement has proven to be beneficial for both workers and their companies. Therefore, it is a highly advisable practice for businesses or companies that want to boost their efficiency and create a healthy environment for their employees.
Statistics have shown that the more frequent reviews are more suitable for all employees, especially the young ones. Moreover, continuous reviews give far better results than traditional methods, as they are immediate indicators of a worker’s performance.