Years after several prominent companies decided to discontinue number-based ratings in performance reviews, the way reviews are conducted has continued to be a hot topic right through 2024.
Last summer the Academy of Management Discoveries published a paper seeking to discover whether organizations should embrace the trend toward narrative (as opposed to numerical) reviews.
The authors conducted experiments involving 1,600 U.S. workers, comparing their reactions to performance feedback when reviews were numerical-only, narrative-only, and a combination of the two.
The findings suggested that “narrative-only feedback was generally perceived as the fairest,” the authors wrote. However, the other two formats were seen as fairer “when the feedback was extremely positive or when recipients were informed about associated monetary outcomes.”
The research also indicated narrative feedback often increased employees’ motivation to improve their work performance.
In a November article in the Harvard Business Review, the study’s authors suggested narrative feedback is often perceived positively because it’s useful in setting future goals and development paths. “It can serve as positive reinforcement for employees whose morale and engagement are influenced by perceptions of fairness,” they wrote.
Another 2024 article, first published in May but highlighted in the Dec. 3 edition of McKinsey & Co.’s “Only McKinsey Perspectives” newsletter, addressed the balance between assessing “what” employees accomplish and “how” they go about their work.
In McKinsey’s survey of 1,800 companies with revenue of at least $100 million, about three in five companies said they look at a mix of the what and the how.
For the “what,” the article noted, companies have historically used quantifiable KPIs and measurable outcomes. However, it added, much corporate work is “complex, multifaceted and fast-paced and can be difficult to capture with rather static KPIs.”
That’s driven many companies to link what McKinsey called “objective key results” to defined objectives. “The objectives represent qualitative, aspirational goals … while the key results are the quantifiable metrics used to measure progress toward those objectives,” McKinsey wrote. “The objectives provide context and direction, capturing the broader strategic intent behind the measurable key results.”
Companies that focus partly on the “how” consider qualities such as collaboration, communication, adaptability and ethical decision-making, according to the article. Such considerations “can help assess leaders whose teams’ outcomes can be hard to measure,” such as long-term projects, complex initiatives or qualitative improvements that aren’t easy to quantify.
Finally, a paper in the June issue of the Journal of Business and Psychology took a gender-based approach to the topic. The study results suggested that while women receive more positive verbal feedback during reviews, they also tend to receive lower numerical ratings.
Reviews by the numbers
• 43% of employees agree that their manager is equipped with sufficient reviewing skills and capabilities
• 32% of employees agree that their rating reflects their individual performance goals
• 59% of companies say they remind reviewers to avoid bias
• 80% of companies say they provide clear evaluation criteria
Source: McKinsey & Co. research
The authors called this phenomenon “protective paternalism,” which may be a result of managers’ fear of appearing biased in their verbal comments to female employees.
Performance reviewers who feel social pressure to avoid exhibiting prejudice “might overcorrect when delivering performance feedback to women” by, for example, omitting negative performance aspects or emphasizing positive performance aspects.
The authors conducted a study demonstrating that reviewers who criticize women’s work performance tend to be perceived as more prejudiced and less communal than those who criticize men’s performance, “thereby highlighting a reason why individuals succumb to social pressures and deliver inflated feedback.”
A September Bloomberg article on the study opined that regardless of which aspect of the performance review is more accurate, “the gap between the two is a problem,” noting that numerical ratings are often used to calculate bonuses and award promotions.
“Seen this way, inconsistent or inflated verbal praise isn’t kind at all,” the article said. “It’s confusing.”
