full study: performance reviews get a failing grade

Performance Reviews Get

A Failing Grade

MethodologyWHOOffice workers18+, Employed Have been in current company at least 1 yearHave been through at least one performance review

• Millennials: 18 – 34 years old• Gen X: 35 – 54 years old• Boomers: 55+ years old

WHENNov 28, 2016 throughDec 6, 2016

HOW20-minute online quantitative survey

HOW MANYU.S. (total sample): 1,500U.S. Margin of Error: +/-2.5%

• Managers: 976• Men: 750• Women: 750

• Millennials: 513• Gen X: 632• Boomers: 355

PERFORMANCE REVIEWS GET A FAILING GRADE

2

METHODOLOGY

KEY FINDINGSPERFORMANCE REVIEWS GET A FAILING GRADE

Performance reviews are time-consuming and outdated

Seventy-two percent of office workers and 88 percent of managers say preparing for reviews is time-consuming. PAGE 10

On average, managers spend 17 hours per employee preparing for a review. PAGE 11

Close to two-thirds of office workers (64%) and managers (62%) agree reviews are outdated. PAGES 12, 13

More than half of office workers agree reviews have no impact on how they do their job (59%) and are a needless HR requirement (58%). PAGE 12

Seventy-three percent of Millennial managers say the review process negatively impacts their ability to do the rest of their job and 68 percent say performance reviews are not effective. PAGE 13

Eighty-eight percent of office workers surveyed have a regularly scheduled, structured, written performance review process at their current companies (PAGE 9). The results that follow pertain to this group.


4

KEY FINDINGS

Performance reviews are stressfulMore than half of office workers agree that performance reviews put them in competition with one another (57%) and feel their manager plays favorites (61%). PAGE 12

Nearly six in 10 say performance reviews are stressful (58%) and having their performance ranked against peers is upsetting (52%). PAGE 12

As a result of a performance review, office workers have cried (22%), looked for another job (37%) or quit (20%). PAGE 14

• Millennials are more likely than other generations to have cried after a review, looked for another job or quit. PAGE 15

• Men are more likely than women to have cried, looked for another job or quit. PAGE 16


5

KEY FINDINGS

More than four in 10 office workers (41%) would switch jobs to a company that didn’t have a formal performance reviews even if pay and job level were the same. PAGE 17

• Men are more likely to switch jobs to a company with no formal performance reviews (52% of men vs. 28% of women). PAGE 17

• Close to two thirds (61%) of Millennials would switch jobs to a company with no formal performance reviews. PAGE 17

Office workers would switch to a job with no performance reviews


6

KEY FINDINGS

Office workers want a changeMore than half (55%) of office workers and two-thirds of (66%) of managers wish that their companies would get rid of or change its structured performance review process. PAGE 18

Sixty-eight percent of Millennials would get rid of the structured performance review process. PAGE 18

Four in five office workers want feedback in the moment rather than it being aggregated over a period of months. PAGE 19

When given the choice, six in 10 office workers want qualitative feedback over numeric ratings. PAGE 20

Office workers believe companies that have abolished traditional reviews would:• be more flexible (46%)• have happier (44%) and higher performing (39%) employees • have a collaborative culture (38%) PAGE 21


7

KEY FINDINGS

DETAILED FINDINGSRATING PERFORMANCE REVIEWS

Most office workers endure performance reviews

Q8. Which of the following describe the performance review process at your current company? (Please select all that apply) (OFFICE WORKERS N=1,500)Q9. How frequently does your performance review occur? (OFFICE WORKERS SELECTING FORMAL PERFORMANCE REVIEW COMPONENTS N=1,410)

*Structured performance reviews are defined as written reviews of an employee’s job performance relative to his/her goals which include formal processes (i.e. rankings, ratings, pay raises are dependent on the review, requires in person conversation) and set frequency (i.e. annually, bi-annually, quarterly). See the ‘Sample Calculation’ section for more detailed responses.

STRUCTURE OF PERFORMANCE REVIEWSAmong U.S. Office Workers Total – Showing % Who Go Through Structured Reviews

88% Have a structured performance review*

12% Do not have a structured performance review


9

DETAILED FINDINGS

Preparing for performance reviews is time-consumingPERCEPTION OF TIME SPENT WHEN PREPARING FOR PERFORMANCE REVIEWSAmong U.S. Office Workers with Structured Performance Reviews – Showing % Selecting

88% Managers

72% Office workers

Time-consuming*

Not time-consuming

Q14. How time-consuming do you find preparing for your own performance reviews to be (e.g. writing your accomplishments, providing peer feedback, preparing for the conversation, etc.)? (OFFICE WORKERS N=1,328)Q21. As a manager, how time-consuming is the process to get ready for your employees’ performance reviews? (MANAGERS N=898)*Showing combined responses for Time-consuming (very/somewhat time-consuming) and Not time-consuming (not very/not at all time-consuming)


10

DETAILED FINDINGS

On average, managers spend more than two work days preparing for each review

Q22. On average, how much time have you spent working on each employee’s performance review (e.g. collecting feedback, writing reviews, rating/ranking team, preparing for conversations, etc.) (MANAGERS N=898)

TIME SPENT PREPARING FOR EACH EMPLOYEE’S REVIEWAmong U.S. Managers with Structured Performance Reviews – Showing Hours Selected

9–16 HOURS 1–8 HOURS17–24 HOURS25–32 HOURS33–40 HOURS

12%

40%

15%15%18%

On average, managers spend 17 hours per employee review.Median of hours spent are 16 hours per employee review.

60% of managers spend more than 8 hours.


11

DETAILED FINDINGS

Office workers say reviews are outdated, stressful and irrelevant

Q15. Please indicate how strongly you agree or disagree with the following statements. (OFFICE WORKERS N=1,328)

Performance reviews are a dated way to manage performance64%

Managers o�en play favorites in the performance review process61%

My performance review has no impact on how I do my job59%

Performance reviews are a needless HR requirement58%

I �nd performance reviews stressful58%

Performance reviews put employees in competition with each other57%

Having my performance ranked against my peers is upse�ing52%

PERCEPTIONS OF PERFORMANCE REVIEWS BY OFFICE WORKERSAmong U.S. Office Workers with Structured Performance Reviews – Showing Top 2 Box (Strongly + Somewhat Agree)


12

DETAILED FINDINGS

62% 61% 57%71% 73% 68%

�e performance review process

is outdated

Performance reviews are not e�ective

�e performance review process

is outdated

�e time I spend on performance reviews

negatively impacts my ability to do my job

Performance reviews are not e�ective

�e time I spend on performance reviews

negatively impacts my ability to do my job

Managers find reviews unproductive

Q24. Please indicate how strongly you agree or disagree with the following statements. (MANAGERS N=898, MILL. MANAGERS, N=410, GEN X MANAGERS N=369, BABY BOOMER MANAGERS N=119)

PERCEPTIONS OF PERFORMANCE REVIEWS BY MANAGERSAmong U.S. Managers with Structured Performance Reviews – Showing Top 2 Box (Strongly + Somewhat Agree)

PERCEPTIONS OF PERFORMANCE REVIEWS BY MILLENNIAL MANAGERSAmong U.S. Millennial Managers with Structured Performance Reviews – Showing Top 2 Box (Strongly + Somewhat Agree)

GEN X57%

BABY BOOMERS 46% GEN X

57%BABY BOOMERS 34%

GEN X51%

BABY BOOMERS 39%


13

DETAILED FINDINGS

Office workers have cried and quit after their performance reviewOFFICE WORKER REACTIONS AS A RESULT OF PERFORMANCE REVIEWS Among U.S. Office Workers with Structured Performance Reviews – Showing % Selecting “Yes”

37%

52%

37% 37% 32%22% 20%

Felt surprised about the feed-back you heard

Looked at job openings at other

companies

Forgo�en what was said

Felt resentful towards your

manager

Go�en angry with your manager

Cried Quit your job

Q16. As a result of a performance review, have you… (OFFICE WORKERS N=1,328)


14

DETAILED FINDINGS

Millennials are more likely to have dramatic reactions

Q16. As a result of a performance review, have you… (MILL N=480, GEN X N=561, BABY BOOMERS N=287)

OFFICE WORKER REACTIONS AS A RESULT OF PERFORMANCE REVIEWS Among U.S. Office Workers with Structured Performance Reviews – Showing % Selecting “Yes”

47%36%

21%34%

18%9%

30%19%

4%

Looked at job openings at other companies

Cried Quit your job

Millennials

Gen X

Baby Boomers


15

DETAILED FINDINGS

Men are more likely to have strong reactions than women

Q16. As a result of a performance review, have you… (MEN N=697, WOMEN N= 631)

OFFICE WORKER REACTIONS AS A RESULT OF PERFORMANCE REVIEWS Among U.S. Office Workers with Structured Performance Reviews – Showing % Selecting “Yes”

43%31%

25%18%

28%

11%

Looked at job openings at other companies

Cried Quit your job

MenWomen


16

DETAILED FINDINGS

People would switch jobs to avoid formal performance reviews

Q19. Would you switch jobs to a company that didn’t have a formal performance reviews even if pay and job level were the same? (OFFICE WORKERS N=1,328)

WOULD SWITCH JOBS BECAUSE OF PERFORMANCE REVIEWSAmong U.S. Office Workers with Structured Performance Reviews – Showing % Selecting “Yes”

WOULD SWITCH JOBS BECAUSE OF PERFORMANCE REVIEWSAmong U.S. Office Workers with Structured Performance Reviews – Showing % Selecting “Yes”

(MILL N=480, GEN X N=561, BABY BOOMERS N=287, MEN N=697, WOMEN N= 631)

52%

28%

Men Women

61%

36%15%

Millennials Gen X Baby Boomers

More than four in 10 U.S. office workers would switch jobs to a company that didn’t have formal performance reviews


17

DETAILED FINDINGS

Millennials and managers especially want a change

Q15. Please indicate how strongly you agree or disagree with the following statements. (OFFICE WORKERS N=1,328, MILL. N=480, GEN X N=561, BABY BOOMERS N=287) Q24. Please indicate how strongly you agree or disagree with the following statements. (MANAGERS N=898)

“I WISH MY COMPANY WOULD GET RID OF PERFORMANCE REVIEWS”Among U.S. Office Workers with Structured Performance Reviews – Showing Top 2 Box (Strongly + Somewhat Agree)

PERCEPTIONS OF PERFORMANCE REVIEWS BY MANAGERSAmong U.S. Managers with Structured Performance Reviews – Showing Top 2 Box (Strongly + Somewhat Agree)

Two in three managers (66%) wish their company would change its current performance review process

55% 68%53%

36%

Total o�ce workers Millennials Baby BoomersGen X


18

DETAILED FINDINGS

Office workers want feedback in the moment

Q17. From the following pairs which would you prefer MOST? (OFFICE WORKERS N=1,328)

PREFERENCE WITH REGARD TO PERFORMANCE FEEDBACKAmong U.S. Office Workers with Structured Performance Reviews – Showing % Selecting

80% Feedback in the moment

20% Feedback that’s aggregated over a period of months


19

DETAILED FINDINGS

The ideal performance review process would be qualitative, not numeric

Q27. If you could create your ideal performance review, which of the following would you have as part of the process? (OFFICE WORKERS, N=1,328)

PREFERENCES ON IDEAL PERFORMANCE REVIEWSAmong U.S. Office Workers with Structured Performance Reviews – Showing % Selecting

60% Qualitative feedback

40% Numeric ratings


20

DETAILED FINDINGS

Office workers believe companies that have eliminated traditional reviews see big benefits

Q20. Some companies have eliminated formal performance reviews and have moved to using a more informal system of ongoing feedback between managers and their employees. A company that does this would be more likely to… (Please select all that apply) (OFFICE WORKERS N=1,328)

PERCEPTIONS OF A COMPANY THAT DOES NOT HAVE A FORMAL PERFORMANCE REVIEW PROCESSAmong U.S. Office Workers with Structured Performance Reviews – Showing % Selecting Likelihood the Company would Be/Have

46% 44% 39% 38%

More �exible

Happier employees

Collaborative culture

Higher performing employees


21

DETAILED FINDINGS


SAMPLE CALCULATION

45%

57%

45% 45%39%

26% 23%

6%*

Requires an in-person

conversation

Rates employees with a score or label (e.g. high/solid/low

performer)

Pay raises are tied to the performance

review

Requires a wri�en form

Requires employees to submit wri�en accomplishments or give a self-rating

Ranks employees performance

relative to how peers performed

My company does not have a structured

performance review process

Requires peers/colleagues to give feedback on each

other’s performance

Most office workers experience structured performance reviews

Q8. Which of the following describe the performance review process at your current company? (Please select all that apply) (OFFICE WORKERS N=1,500)*These respondents were removed from the sample as their current company does not have structured performance reviews.

COMPONENTS OF PERFORMANCE REVIEW PROCESSAmong U.S. Office Workers Total – Showing % Selecting

23

PERFORMANCE REVIEWS GET A FAILING GRADESAMPLE CALCULATION

Most office workers go through structured reviews with set frequency

Q9. How frequently does your performance review occur? (OFFICE WORKERS N=1,410)*These respondents were removed from the sample of respondents with structured reviews, as the timing of their reviews did not have a set frequency.

FREQUENCY OF PERFORMANCE REVIEWSAmong U.S. Office Workers with Formal Performance Review Processes – Showing % Selecting

63%

25%

6% 6%*

Once a year (annually)

Twice a year (bi-annually)

�e timing is �exible

Four times a year (quarterly)

24

PERFORMANCE REVIEWS GET A FAILING GRADESAMPLE CALCULATION

full study: performance reviews get a failing grade

Recruiting & HR