The Importance of Employee Appraisals


GE, Adobe and Deloitte recently announced they are abandoning their performance reviews for more one-on-one interactions. Though they will continue to do annual or bi-annual compensation and promotion processes, they want to move towards more ongoing discussions and feedback with employees. Following suit are the likes of Microsoft, Dell, Accenture and New York Life.

Why is this trend occurring and what does this mean for your workplace? We dove into the issue and found some stats that may explain the movement.


What we know as the annual employee appraisal system is obviously being challenged and it probably has a lot to do with the distaste of leadership and the modern workforce’s view on employment. Currently, 58% of HR executives give their performance management systems a “C” or below. A “just passing” grade may be acceptable for some organizations, but for others, it screams a need for change.

Tweet This: 58% of HR execs give their performance management systems a “C” or below:

The cost vs. benefit of a system is brought into question for every system of a company and the performance review is no exception. A measly 6% of business and HR leaders think their current process for managing performance is worth it. The cost of time for those using the established process and those being evaluated by it adds up fast.

Many companies have not changed their processes for some time as 58% of organizations continue to use spreadsheets as their primary way to track performance metrics. With the tools available to the average HR pro, we’re left to wonder why that number is so high? It becomes blatantly obvious the current system simply doesn’t work and companies are changing how they approach their employees because of it.

Find out: Are You A Performance Management Genius?


The benefit of interacting with employees cannot be understated. On average, only 15% of employees who work for a manager who does not meet with them regularly are engaged; managers who regularly meet with their employees almost tripled that level of engagement.

Tweet This: Only 15% of employees who work for a manager who does not meet with them regularly aren’t engaged.

Even something as simple as feedback can pay big dividends. 43% of highly engaged employees receive feedback at least once a week. Any form of feedback is valuable feedback to your employees, all they ask is it comes regularly. The result of increased engagement is why many companies are turning towards 360-feedback programs where they can give feedback immediately instead of waiting to provide insight.

Read More: How Does Employee Engagement Affect Performance?


The benefits from feedback do not stop at engagement. Companies who implement regular employee feedback have turnover rates that are 14.9% lower than for employees who receive no feedback. The absence of feedback may save a manager’s time, at the moment, but going on a search for a replacement employee will prove much more costly.

80% of workforce issues are related to employee communications and 4 out of 5 problems in the workplace could be solved with better feedback. Solving problems of miscommunication, or the absence of communication, with a little feedback is simpler and more beneficial than some companies realize.

“What [Millennials] want most from their managers isn’t more managerial direction, per se, but more help with their own personal development.” -Karie Willyerd, the workplace futurist for SuccessFactors

Improve Today: 5 Bad Reactions Employees Have When You Give Crappy Feedback

Many companies are moving away from the traditional yearly or bi-yearly performance review and utilizing face-to-face interactions on a weekly basis, but that doesn’t mean it will work for your organization. Instead, improve your engagement, retention and solve many of your workplace issues with some added feedback between the structured performance review. Embrace a 360- degree feedback system and reap the rewards.


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