Full Study: Performance Reviews Get a Failing Grade

Full Study: Performance Reviews Get a Failing Grade
Performance Reviews Get A Failing Grade
Methodology WHO Office workers 18+, Employed Have been in current company at least 1 year Have been through at least one performance review • Millennials: 18 – 34 years old • Gen X: 35 – 54 years old • Boomers: 55+ years old WHEN Nov 28, 2016 through Dec 6, 2016 HOW 20-minute online quantitative survey HOW MANY U.S. (total sample): 1,500 U.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 FINDINGS PERFORMANCE 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Performance reviews are time-consuming and outdated Seventy-two percent of office workers and 88 percent of managers say preparing for reviews is time-consuming.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 PAGE 11 Close to two-thirds of office workers (64%) and managers (62%) agree reviews are outdated.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 stressful More 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 change More 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 FINDINGS RATING 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 REVIEWS Among 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-consuming PERCEPTION OF TIME SPENT WHEN PREPARING FOR PERFORMANCE REVIEWS Among 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 REVIEW Among 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 performance 64% Managers often play favorites in the performance review process 61% My performance review has no impact on how I do my job 59% Performance reviews are a needless HR requirement 58% I find performance reviews stressful 58% Performance reviews put employees in competition with each other 57% Having my performance ranked against my peers is upsetting 52% PERCEPTIONS OF PERFORMANCE REVIEWS BY OFFICE WORKERS Among 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% The performance review process is outdated Performance reviews are not effective The performance review process is outdated The time I spend on performance reviews negatively impacts my ability to do my job Performance reviews are not effective The 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 MANAGERS Among U.S. Managers with Structured Performance Reviews – Showing Top 2 Box (Strongly + Somewhat Agree) PERCEPTIONS OF PERFORMANCE REVIEWS BY MILLENNIAL MANAGERS Among U.S. Millennial Managers with Structured Performance Reviews – Showing Top 2 Box (Strongly + Somewhat Agree) GEN X 57% BABY BOOMERS 46% GEN X 57% BABY BOOMERS 34% GEN X 51% BABY BOOMERS 39% PERFORMANCE REVIEWS GET A FAILING GRADE 13 DETAILED FINDINGS
Office workers have cried and quit after their performance review OFFICE 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 feedback you heard Looked at job openings at other companies Forgotten what was said Felt resentful towards your manager Gotten 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 Men Women 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 REVIEWS Among U.S. Office Workers with Structured Performance Reviews – Showing % Selecting “Yes” WOULD SWITCH JOBS BECAUSE OF PERFORMANCE REVIEWS Among 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 MANAGERS Among U.S. Managers with Structured Performance Reviews – Showing Top 2 Box (Strongly + Somewhat Agree) Two in threemanagers (66%) wish their company would change its current performance review process 55% 68% 53% 36% Total office 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 FEEDBACK Among 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 REVIEWS Among 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 PROCESS Among U.S. Office Workers with Structured Performance Reviews – Showing % Selecting Likelihood the Company would Be/Have 46% 44% 39% 38% More flexible 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 written form Requires employees to submit written 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 PROCESS Among U.S. Office Workers Total – Showing % Selecting 23 PERFORMANCE REVIEWS GET A FAILING GRADE SAMPLE 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 REVIEWS Among U.S. Office Workers with Formal Performance Review Processes – Showing % Selecting 63% 25% 6% 6%* Once a year (annually) Twice a year (bi-annually) The timing is flexible Four times a year (quarterly) 24 PERFORMANCE REVIEWS GET A FAILING GRADE SAMPLE CALCULATION

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