Does Your Delivery of Feedback Cost Your Business Money?

The importance of providing feedback and how communication techniques help or hinder progress

How well has your company or nonprofit trained managers to deliver feedback to employees? Do workers receive feedback on a consistent basis? Does the communication include a full feedback loop, or does the information come from the top down? Will the feedback provide benefit for the growth of the employee, or does it smack of negativity to exert control? Can you back your performance review with data?

If your performance evaluation process provides heartbreak, a loss of self-efficacy, and angst instead of relationship-building, coaching, and continuous improvement, it may impact both your organization’s top-line revenue and bottom-line profit.

Within the realm of performance management, employers institute various methods of evaluating work behaviors and outcomes and communicating positive or negative feedback to employees. Traditionally, an annual or semi-annual performance review has served as the quintessential tool used by organizations for the purposes of distributing rewards and promotions or performance improvement plans (Minnikin, Beck, & Shen, 2022). More and more research, however, recommends that more frequent feedback should be administered during everyday work for continuous improvement and the development of competencies and performance (Mueller-Hason & Pulakos, 2015).

In fact, today’s employees tend to seek feedback more frequently to gain new knowledge, reduce confusion and ambiguity, and to improve their skills to help them meet their goals (Minnikin, Beck, & Shen, 2022). However, feedback providers including managers and peers may not have the right motives to provide accurate and compassionate feedback, or they may lack the competencies to deliver feedback in a beneficial and ethical manner. When these situations collide – goal-oriented employees seeking communication for improvement meeting incapable or willing feedback providers – the result can have counterproductive effects on the organization resulting in losses of job satisfaction, quality in job performance, and organizational commitment. Reductions in quality and identifying with the employer impact talent retention and the reputation of the organization as a place where people want to work.

How Not to Deliver Feedback

Above all, managers should strive for the ethical treatment of others. This means they should seek to provide benefit and not do harm, to communicate with truth and integrity, to exercise fairness, to respect the rights of others, and to care about the wellbeing of all. However, for various reasons including personality, personal affect due to stress and anxiety, or cultural conditioning (i.e. “We’ve always done it this way.”), some feedback providers communicate less effectively leaving damage in their wake. Here I present some things not to do when providing feedback to employees:

• Do not deliver feedback when angry; wait until you can talk in a composed manner.

• Do not provide negative feedback in front of others; talk in private.

• Do not make generalizations; be prepared with examples.

• Do not simply criticize; be prepared to coach and develop.

• Do not say, “You should have known,” or, “You should know by now;” use constructive and caring words

• Do not keep positive feedback private; acknowledge positive feedback with teammates.

• Do not save up a bunch of complaints; deliver critiques offering solutions as issues arise.

• Do not bring up irrelevant information; seek validity to the construct and content of your feedback.

• Do not aim to fire; retention of talent of committed employees should be your aim.

This list will not cover everything, but it does provide some questions to ask oneself before participating in a conversation which can have an effect on the affect and behaviors of subordinates or peers.

The Cost of Poor Feedback

Delivering poor feedback to employees can have a wide range of negative consequences for the individual being evaluated. Furthermore, it can impact the overall health and productivity of the organization. Some potential repercussions include:

• Decreased Morale: Poor feedback can demotivate employees and make them feel unappreciated or misunderstood. This can result in a decrease in enthusiasm and commitment to their roles. Demoralized employees might take more sick days or personal days, leading to a potential loss in productivity with potential costs to compensate other employees who may need to cover the absent employee's tasks.

• Reduced Productivity: Employees who don’t receive clear, constructive feedback may not understand how to improve. These employees may stagnate or even lower their performance. Reduced productivity can mean delayed projects, more errors, or lower-quality outputs, all of which can have financial implications for a company.

• Increased Turnover: Employees who consistently receive poor feedback, especially if it feels unwarranted or non-constructive, may opt to leave the company. This can lead to increased costs associated with hiring and training new staff. This means costs associated with recruiting, hiring, onboarding, and training new employees plus a loss of the unique value those lost employees bring to the organization.

• Trust Issues: Poor feedback can erode trust between employees and management. When feedback feels arbitrary, insincere, or overly critical, it can make employees question the motives or competence of their leaders.

• Inhibition of Personal Growth: Feedback should seek to help employees understand their strengths and their areas of improvement. Without this guidance, employees may miss out on valuable opportunities for personal and professional growth.

• Poor Team Dynamics: Unclear or negative feedback can foster misunderstandings within a team. If one member feels they are being unfairly targeted or if they don’t understand their role, conflicts and inefficiencies can arise.

• Cultural and Reputation Problems: Organizations without effective feedback can develop a counterproductive culture where employees and managers avoid communication altogether. Consequently, problems go unaddressed. This can lead to an exodus of employees from the company. A high turnover rate, disgruntled employees, or legal issues can damage a company's reputation. This can lead to loss of customers, increased costs for reputation management and marketing, difficulty in attracting top talent, and even potential stock price implications for publicly traded companies.

• Loss of Credibility for Management: Leaders who regularly provide poor feedback might be seen as lacking in leadership skills. Team members may not become inspired and may not respect managers or executives.

• Stress and Mental Health Impacts: Persistent negative feedback or feedback that feels personal can contribute to increased stress levels and may negatively affect an employee's mental well-being. If that’s not enough, this can lead, in some companies, to higher costs for companies offering health benefits.

• Legal Ramifications: In some cases, if feedback contains unfair bias or can be perceived as harassment, organizations might face legal challenges. Defending against these claims, regardless of the outcome, can incur high expenses. Settlements or judgments against the company can also carry significant financial penalties.

To avoid these pitfalls, organizations should train their managers to deliver feedback with clear, constructive, and a goal-oriented mindset geared towards fostering growth and improvement. Irregular feedback based on coercion, withholding information, or lies can mean financial costs for the company. However, regular feedback, delivered with the right intent and in the right way, can boost performance, engagement, and job satisfaction.

Best Practices in Providing Feedback

Feedback, when beginning with goals and making a two-way dialogue on a frequent basis, can provide an engaging and productive work environment (Pulakos, 2004). Ultimately, behaving in a socially inviting and helpful manner with growth in mind leads to the best outcomes. Keep these in mind when delivering feedback for the best results.

Growth Mindset

Carol Dweck (2006) describes a growth mindset as the belief that one can improve their knowledge, skills, abilities and other characteristics (KSAOs) by consistent effort through facing challenges to overcome obstacles. Good feedback can help employees move beyond the belief that they can only achieve to the extent of their natural talents and current perceived limits. Through feedback, iteration, perseverance, and practice, workers can learn new things, gain KSAOs, and grow beyond their limits.

Reference Goals

According to goal-setting theory, difficult yet attainable goals provide motivation for workers to improve performance (Locke & Latham, 2019). Starting with SMART (specific, measurable, attainable, realistic, and time-constrained) goals which tie to organizational objectives, feedback can provide a positive effect on goal attainment. Feedback with validity to what managers and employees seek to accomplish can put everyone into alignment and provide motivation for performance.

Embrace Technology

While good, old-fashioned face-to-face talking with a pen and paper serves as better than nothing, do not fear leveraging technology. Data collection and analysis, particularly regarding key performance indicators (KPIs) using statistical tools or even Excel can help to reduce ambiguity and provide evidence for positive and negative performance evaluations. Furthermore, data storage and sharing can loop in all stakeholders and facilitate communication.

Experiment with Communication Channels

Do not hold fast to stodgy in-person or telephone meetings. Today’s world offers more ways to communicate and collaborate. Some channels may work better than others, so try leveraging other communication channels such as Zoom, Teams, WebEx or other similar conference systems when face-to-face communication becomes a requirement. Furthermore, other collaboration software such as SharePoint, Slack, Asana, Trello, or other project management, chat, or data storage solutions can help with document distribution. While face-to-face, in-person communication offers the richest possible communication channel, other media offer their own advantages when establishing a feedback loop.

Coach

Feedback should never end as a one-and-done situation. As a dialogue, it can and should be continued through the duration of the relationship. Managers and executives can guide workers to find their own solutions – as opposed to dictating “how-to” behaviors. Complimenting a growth mindset, coaching can raise self-efficacy and improve performance over time with lasting results.

Leverage Ethics

As discussed, bullying behaviors, exhibiting deceit, disrespecting others, and overall behaving counterproductively in the feedback process (including from refraining from engaging in feedback) does not indicate a high degree of ethics for the individual or the organization. When delivering feedback, seek to do no harm, to provide benefit, to offer respect, to express honesty with integrity, and to maintain fairness. Most of all, act with care and compassion; ethical feedback can help save money and pay dividends.

References

Dweck, C. S. (2006). Mindset: The new psychology of success. New York: Random House.

Locke, E. A., & Latham, G. P. (2019). The development of goal setting theory: A half century retrospective. Motivation Science, 5(2), 93–105. https://doi-org.libauth.purdueglobal.edu/10.1037/mot0000127

Minnikin, A., Beck, J. W., & Shen, W. (2022). Why do you ask? the effects of perceived motives on the effort that managers allocate toward delivering feedback. Journal of Business and Psychology, 37(4), 813-830. doi:https://doi.org/10.1007/s10869-021-09776-x

Mueller-Hanson, R.A. & Pulakos, E.D. (2015). Putting the “performance” back in performance management. Society for Human Resource Management (SHRM) & Society for Industrial and Organizational Psychology (SIOP). https://www.shrm.org/hr-today/trends-and-forecasting/special-reports-and-expert-views/Documents/SHRM-SIOP%20Performance%20Management.pdf

Pulakos, E.D. (2004). Performance Management: A roadmap for developing,

implementing and evaluating performance management systems. Society for Human Resource Management (SHRM).

Rabbani, M., & Seyyed, B. A. (2023). Does feedback seeking always improve performance? Investigating the roles of feedback seeking content and frequency in determining goal achievement and behavior-related performance. Foundations of Management, 15(1), 7-24. doi:https://doi.org/10.2478/fman-2023-0001