Are performance reviews a waste of time?

by L&D25 May 2016
Despite the vast majority of employers believing regular performance appraisals are important to engage their workforce, new research shows that more than half of employees don’t find them useful.

Indeed, just 48% of Australian employees said they found their company’s performance review process and the feedback they received useful, according to Sunsuper’s 2016 Australian Employee Insights Report.

Of the 84% of workers who have regular performance reviews, most only have them yearly.

However, employees who have a performance review at least every six months are the most likely to find the process useful (57%).

The results show that companies still have work to do when it came to incentivising performance reviews, and recognising and rewarding employees, said Sunsuper’s Executive General Manager, Customer Service and People, Steven Travis.

“When asked why employees didn’t find their performance review useful, the majority of people said it was because they aren’t ‘directly rewarded based on their review’ (47%), followed by their company ‘isn’t prepared to pay more for above average performance’ (34%) and ‘my manager doesn’t recognise the value I add’ (27%),” said Travis.

“It’s not as simple as just having a performance review process. Incentive and reward programs are also needed to reinforce the process and remind staff that their work and contribution is valued.

“It’s one thing for employees to feel heard; it’s another for them to feel valued and recognised, and the report also found that more than two thirds of Australians (71%) don’t feel regularly rewarded or recognised for their performance.”

The report also features findings about Australians’ ideal business leaders, the characteristics they value in a leader, and the company benefits they most prefer.

Other key findings of the report include:

• Less than half (46%) of people said they always trust their immediate manager and less than a quarter (24%) said they always trust senior management.

• Integrity is the most valued characteristic in a leader (27%), followed by trust (23%), good with people (19%), good business vision (10%), credibility (8%), reliability (7%), previous experience (3%), education/formal qualifications (2%) and charisma (1%).

• Richard Branson is Australians’ preferred business leader (44%), followed by Bill Gates (21%), Martin Luther King (12%), Abraham Lincoln (7%), Janine Allis (6%), Hilary Clinton (5%), Mark Zuckerberg (4%) and Kanye West (1%).

L&D Professional recently reported that 77% of employers said regular performance appraisals are ‘very important’ or ‘important’ in engaging their workforce, according to a recent report by Hays.

However, 76% of employees instead want the opportunity to provide feedback on cultural and performance factors, which could involve reverse appraisals or employee surveys.

Related stories:

The idea which employees prefer to performance appraisals

5 ways to implement effective performance reviews 

Four ways to deal with learners resistant to feedback