Finding 1
Employees who have confidence in their performance management review process have much higher trust in their organizations.
Performance review processes have undergone significant changes since the pandemic, but it’s clear that the changes either have not gone far enough to substantially improve employee experience or have not yet been fully realized. Employees have mixed perceptions of how performance reviews are working, with many citing them as a waste of their time and 1 in 3 calling them an outright failure. While team trust is largely unaffected by performance reviews, faith in the success or failure of these processes goes hand in hand with trust in managers, leaders, and HR.
Performance review processes have undergone significant changes since the pandemic, but it’s clear that the changes either have not gone far enough to substantially improve employee experience or have not yet been fully realized. Employees have mixed perceptions of how performance reviews are working, with many citing them as a waste of their time and 1 in 3 calling them an outright failure. While team trust is largely unaffected by performance reviews, faith in the success or failure of these processes goes hand in hand with trust in managers, leaders, and HR.
Has the performance review process in your company undergone a fundamental shift since 2020?
New technology and/or processes
No, it has not changed
I’m not sure
Performance reviews are changing. Since 2020, 46% of our survey respondents told us their companies have added new performance management technology (17%), new processes (18%), or both (11%). This likely reflects efforts on the part of leaders to streamline performance development and create more equitable review and development processes in response to major changes in how we work and the ongoing talent crunch. Some of these efforts are paying off. For example, employees whose companies implemented new technology and/or processes were more likely to see their performance reviews as fair and unbiased, say they felt recognized, view performance management as relevant to their daily work, and were twice as likely to feel the performance management process was useful to their performance (61% versus 28%).
Performance reviews are changing. Since 2020, 46% of our survey respondents told us their companies have added new performance management technology (17%), new processes (18%), or both (11%). This likely reflects efforts on the part of leaders to streamline performance development and create more equitable review and development processes in response to major changes in how we work and the ongoing talent crunch. Some of these efforts are paying off. For example, employees whose companies implemented new technology and/or processes were more likely to see their performance reviews as fair and unbiased, say they felt recognized, view performance management as relevant to their daily work, and were twice as likely to feel the performance management process was useful to their performance (61% versus 28%).
37% of workers with a opinion said that performance management is an outright failure in their company. That’s an “F” grade when it comes to their performance, alignment, and career growth.
Despite these trends, only 1 in 3 (32%) of all employees today said their current performance management system helps them perform better
Despite these trends, only 1 in 3 (32%) of all employees today said their current performance management system helps them perform better
This may account for why so few employees believe the performance review process was a good use of their time: 19% said the process was never a waste of time and effort, and 64% see it as always or sometimes a waste.
Similarly, only 46% of employees said they believe performance management is a success. But 27% of respondents said they didn’t know, and another 27% of workers said that performance management is a failure in their company.
37% of workers with a opinion said that performance management is an outright failure in their company. That’s an “F” grade when it comes to their performance, alignment, and career growth.
If we remove those who do not know and recalculate, that’s 37% of those with an opinion on their performance management saying it is an outright failure. That’s an “F” grade when it comes to their performance, alignment, and career growth.
Despite these trends, only 1 in 3 (32%) of all employees today said their current performance management system helps them perform better
This may account for why so few employees believe the performance review process was a good use of their time: 19% said the process was never a waste of time and effort, and 64% see it as always or sometimes a waste.
Similarly, only 46% of employees said they believe performance management is a success. But 27% of respondents said they didn’t know, and another 27% of workers said that performance management is a failure in their company.
Only 32% of people trust their leaders, and only 26% said they trust HR. This gap may be undermining overall faith in the system.
One reason so many workers lack confidence in their performance management and assessments may be a lack of organizational trust.
While 68% of respondents told us they trust their teams and 63% trust managers, only 32% of people trust their leaders, and only 26% said they trust HR — who are often the custodians of the performance appraisal process. This gap may be undermining overall faith in the system.
Only 32% of people trust their leaders, and only 26% said they trust HR. This gap may be undermining overall faith in the system.
One reason so many workers lack confidence in their performance management and assessments may be a lack of organizational trust.
While 68% of respondents told us they trust their teams and 63% trust managers, only 32% of people trust their leaders, and only 26% said they trust HR — who are often the custodians of the performance appraisal process. This gap may be undermining overall faith in the system.
The success of performance management correlates with levels of trust across the organization
Trust: When performance management is seen as a success
Baseline feelings of trust
Trust: When performance management is seen as a failure
While 68% of respondents told us they trust their teams and 63% trust managers, only 32% of people trust their leaders, and only 26% said they trust HR — who are often the custodians of the performance appraisal process. This gap may be undermining overall faith in the system.
It’s worth noting that trust in managers drops 23% when people have lost confidence in the performance review process. Conversely, we see more trust in managers when people believe performance management is a success — rising to 79% from a baseline of 63%. This is nearly double the level of trust in managers compared with employees who see performance management as a failure.
We saw similarly dramatic shifts in the levels of trust people have in organizational leaders and human resources — where trust in both organizational leaders and HR leaders is more than 4x higher when employees view performance management as successful.
While 68% of respondents told us they trust their teams and 63% trust managers, only 32% of people trust their leaders, and only 26% said they trust HR — who are often the custodians of the performance appraisal process. This gap may be undermining overall faith in the system.
It’s worth noting that trust in managers drops 23% when people have lost confidence in the performance review process. Conversely, we see more trust in managers when people believe performance management is a success — rising to 79% from a baseline of 63%. This is nearly double the level of trust in managers compared with employees who see performance management as a failure.
We saw similarly dramatic shifts in the levels of trust people have in organizational leaders and human resources — where trust in both organizational leaders and HR leaders is more than 4x higher when employees view performance management as successful.
Read our recommendation
1
How to build trust and reduce bias in performance processes.
Traditional performance management has 100-year-old roots. While it has changed over time, the approach is not well-suited to employee expectations, the realities of modern work, and the speed of change. Organizations and employees increasingly realize and expect that performance management must help drive employee engagement to improve organizational performance. With agile and matrixed working models on the rise, enabling discussions of progress against targets need to be more frequent to help employees stay aligned with their organization’s strategic goals. Employees also expect their everyday work experience to enable, not hinder, their performance.
HR needs to take a forward-looking perspective about how to enable performance every day, rather than looking in the rear-view mirror by measuring performance once or twice a year.
