While the U.S. economy continues to add jobs, businesses are losing jobs. In this environment, when employees leave, their roles tend not to be filled. Retaining your existing team is more important than ever, and poor feedback practices are a major contributor to high employee turnover.
At Textio, we investigated the reasons for this churn. Our integrated reporting Involves surveying corporate employees across a variety of industries and studying the relationship between the feedback they receive in formal performance reviews and employee retention.
We make it clear that poor or inadequate feedback can lead to employee turnover. Furthermore, our findings suggest that not all feedback is created equal, and not all employees receive equal feedback.
Employees who receive no clear feedback resign
According to this year’s survey, 38% of people are either actively considering leaving their current workplace or have already ventured out to interview elsewhere.
About 61% of respondents who plan to stay with their organization agree that they understand their manager’s expectations for their next promotion. Of those who plan to leave an organization, only 21% do so.
While people cite a variety of reasons for considering a new role, from money to greater flexibility to relocation, several of the most common reasons relate directly to the feedback people receive at work. In fact, 17% of respondents specifically cited “lack of feedback” as the main reason they were looking for other roles. Many other participants cited reasons related to giving back, such as “feeling unappreciated” or “lack of opportunities for growth.”
Not all feedback is equally effective
Survey data shows a strong link between the feedback employees receive and their decisions to stay or leave an organization. We also analyzed the performance evaluation data set to see if the same pattern existed. It turns out that people who receive unactionable feedback are significantly less likely to join an organization a year later.
To explore this, we studied performance appraisals across different roles in a large international corporate organization. The data set contains performance reviews of more than 13,000 employees over two annual review cycles. Because we have two years of data, we can see if the employees in the Year 1 data set are also included in the Year 2 data set. In other words, for each employee, we can see the quality of their written performance feedback and their retention or attrition results for the following year.
People who receive low-quality feedback are more likely to leave an organization than people who receive more actionable feedback. What’s more, the effect is causal, not just correlational: Our analysis controls for potential confounders such as digital performance ratings and employee tenure. People who receive low-quality feedback are 63% more likely to leave an organization. This applies whether they are high, medium or low performers.
Low-quality, unactionable feedback is particularly problematic when considering its prevalence: 50% of people in our dataset received at least some unactionable feedback.
That’s not all. Avoiding providing direct feedback can also lead to employees quitting. Even if feedback is provided, it may be done in a way that avoids conflict and is indirect. Hedging is a common practice in which feedback providers express their expected feedback in less direct terms.
Provided by Textio
The use of questionable hedging language is widespread, with one in three people in this year’s set receiving such feedback. Consider the difference between telling your report “You must complete a draft this week” versus “You might consider completing a draft this week.” When managers use hedging language to make requests that employees understand as demands, they dilute the message.
“I think” is by far the most commonly used phrase in hedging feedback. By introducing feedback with “I think” statements, managers are sending the message that their point of view may just be a matter of opinion, and they may not entirely agree with it. This is problematic even in positive feedback because the manager is inadvertently expressing doubts about the praise they are being given. For example, say “I thought your presentation was well done,” rather than just saying the report was well done.
This is important. People who received performance reviews that included “I think” hedging statements were 29% more likely to leave the company within a year.
High-quality feedback is unevenly distributed
Giving back is important for employee retention, but not all demographic groups are equally likely to receive high-quality feedback. As reported last year, women of all races and people of color of all genders receive lower quality feedback and less overall feedback than others.
For example:
- 83% of men said they understand what is required for their next promotion, compared with 71% of women, non-binary and transgender people.
- Only 54% of Asians say they understand what it takes to get their next promotion.
- Black employees received 26% more inactionable feedback than non-Black employees, even though the overall number of feedback received was only 79%.
Overall, written feedback also reinforced problematic stereotypes. Men are twice as likely as women to be considered “ambitious,” while women are twice as likely to be considered “helpful.”“
Latinos are twice as likely to be described as “hot” than whites. Meanwhile, white people are twice as likely as Asians to be described as “easy to work with.”
In other words, groups with the highest turnover in corporate workplaces also systematically receive the lowest quality feedback. If you don’t invest in employee growth, they will leave.
These problems have been going on for so long with so little improvement that States, cities are exploring promotional transparency laws This will require organizations to ensure fairness and justice throughout employee growth and promotion.
Good governance and feedback processes could soon have the same legislative support that pay transparency brings to workers. We already know how this happens –91% of job seekers, regardless of seniority or industry, now say including a salary range in a job title affects their decision to apply. It’s only a matter of time before employees expect the same level of transparency in the promotion process.
Kieran Snyder is the CEO of Textio. Yan Malun Is the founder and CEO of Operator Collective.
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