Top 10 Performance Management Statistics Every Manager Should Have

We've said it before and we'll say it again: the way companies have been managing employee performance simply isn't working. It's time to seriously rethink performance management and focus on performance enablement instead.

But it's also important to look at why these outdated performance methods aren't serving companies or their employees so we can understand exactly what's missing and what newer forms of performance empowerment can add. Here are the ten most insightful performance management statistics you should know.

Performance management in numbers

1.Less than 20% of employees feel inspired by their reviews

Let's start with a pretty clear statement about the current state of performance management: Less than a fifth of employees find their performance reviews inspiring, according to research from SHRM and Gallup.

The purpose of performance management is exactly the same: management. But that's not a very motivating way to look at employee performance, and it certainly doesn't inspire employees to go above and beyond and do their best.

2.95% of managers are dissatisfied with their company's performance appraisal system

It's not just employees who find performance reviews under a traditional performance management system unhelpful at best (and harmful at worst): This data from a Gallup study shows that almost all managers agree. And managers aren't alone: Only 1 in 4 companies say their performance management systems are effective.

3.Women receive 22% more personality feedback than men

A major problem with current performance management is that it is often not fair, impartial or even actionable. Research from Textio shows that women receive 22% more feedback based on their personality than men, e.g. if they are described as harsh or opinionated.

The same study found further disparities in the way people receive feedback in the workplace: Black and Latinx people are 2.4 times more likely to receive feedback that is not actionable than whites and Asians, and people over 40 are three times more likely to receive feedback unselfishly referred to as younger workers.

This rather obvious lack of fairness and objectivity does not encourage employees to do more, but sometimes even encourages them to quit.

4.3 out of 4 Gen Z employees quit if they don’t receive feedback

And they will quit if they receive no evidence of their performance. Recent research shows that younger workers rely on regular feedback so much that 73% say they would be more likely to quit if they didn't receive regular feedback and communication from their managers. Older generations may not be as adamant, but more than half of them agree with Generation Z on this.

And while younger workers are often negatively described as more demanding, guess what? Frequent feedback and communication with superiors are an essential element of success for young professionals. Generation Z is in the right here

5.Only 21% of employees feel their performance metrics are within their control

Gallup research shows that employees are often not motivated by their performance reviews because they are simply not being evaluated on what they can control. These may include company-wide results in a large company, the results of a team or department project in which they were not involved, or other goals set without consideration of their specific role.

Because the results of these metrics are out of their control, it is difficult for employees to feel a real sense of accountability or accomplishment and to feel motivated to improve (although they might legitimately wonder in what way).

6.Employees are 3.6 times more motivated when they receive daily (rather than annual) feedback

Feedback must be frequent to be effective: Gallup research shows that daily feedback significantly increases employee motivation. Frequent feedback shows employees that their managers are paying attention to them and recognizing what they do every day, and this kind of careful, positive attention is very meaningful.

It also gives employees the opportunity to course-correct in real time when negative behavior is hindering them, and allows them to reflect on their strengths much more quickly than if they were only told about them in their annual review.

7.47% of employees receive feedback only a few times a year - or less

However, most employees don't receive even close to this valuable daily feedback. 28% of employees receive feedback from their managers only a few times a year, and 19% receive it once a year or less. This means that almost half of the workforce doesn't receive nearly enough feedback to engage and motivate them.

Imagine being a professional runner who runs every single day of the week, but you never see any data about your speed and pace or where you rank compared to other runners? Then once a year you would be thrown into a gigantic arena with all the other runners in your area, and that one race would determine your compensation for the coming year. Sounds pretty confusing, doesn't it? But this is still how many companies and managers treat their employees.

8.Performance reviews worsen performance more than a third of the time

That's not a typo or rounding error: it's correct, and there are a number of reasons for it, such as: poorly trained managers and legal considerations. A Gallup study, citing this staggering statistic from the American Psychological Association, also finds that these performance reviews are expensive - costing a 10,000-employee company between $2.4 million and $35 million per year in lost work hours. So many companies lose productivity through an activity that...also degrades performance. Oof! What a combo.

9.60% of companies that report having an effective performance management system perform better than their competitors.

To conclude this guide, a few more positive statistics. When done effectively, performance management and enablement give companies a significant competitive advantage (probably because so many companies do it poorly). McKinsey research has found that companies with strong performance management strategies report performing better than others in their industry - nearly three times more than companies that say their performance management is ineffective.

10.63% of remote workers who receive feedback from their managers multiple times a week are engaged

This Gallup study compares these engaged remote workers to those who only receive feedback a few times a year: only 31% are engaged (and only 19% of those who receive feedback once a year or less).

A similar increase also applies to hybrid workforces: 57% of those who receive feedback several times a week are engaged, compared to just 20% who receive feedback only several times a year and 10% who receive feedback less than once a year. This data highlights the importance of feedback in engaging employees who are not in the office full-time, which is potentially a large portion of your workforce today.

The most important findings

The current state of performance management is not good. Because there is a lack of fairness and equality, many managers are untrained in how to handle these conversations, and infrequent feedback is the norm, we still have a long way to go to make these performance conversations more regular and motivating.

Luckily, you can start giving your employees more frequent feedback, including positive recognition, today. The solution? Focus on driving performance rather than managing it. With the IceHrm employee recognition and feedback platform, your company can create a strong culture of recognition throughout the year and reap the benefits of frequent feedback.

Performance management systems are falling short, but the stats show the way forward: frequent feedback, fairness, and empowerment. IceHrm offers the tools to make it happen.