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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Performance reviews are time-consuming and outdated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Close to two-thirds of office workers (64%) and managers (62%) agree reviews are outdated.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.
PERFORMANCE REVIEWS GET A FAILING GRADE
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
PERFORMANCE REVIEWS GET A FAILING GRADE
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
PERFORMANCE REVIEWS GET A FAILING GRADE
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
PERFORMANCE REVIEWS GET A FAILING GRADE
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
PERFORMANCE REVIEWS GET A FAILING GRADE
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)
PERFORMANCE REVIEWS GET A FAILING GRADE
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.
PERFORMANCE REVIEWS GET A FAILING GRADE
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)
PERFORMANCE REVIEWS GET A FAILING GRADE
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%
PERFORMANCE REVIEWS GET A FAILING GRADE
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)
PERFORMANCE REVIEWS GET A FAILING GRADE
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
PERFORMANCE REVIEWS GET A FAILING GRADE
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
PERFORMANCE REVIEWS GET A FAILING GRADE
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
PERFORMANCE REVIEWS GET A FAILING GRADE
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
PERFORMANCE REVIEWS GET A FAILING GRADE
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
PERFORMANCE REVIEWS GET A FAILING GRADE
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
PERFORMANCE REVIEWS GET A FAILING GRADE
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
PERFORMANCE REVIEWS GET A FAILING GRADE
21
DETAILED FINDINGS
PERFORMANCE REVIEWS GET A FAILING GRADE
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