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The Power of Incorporating Feedback Into Your Rewards Model


The term feedback often has a negative connotation in the world of work. Generally, when a manager or executive is providing feedback to one of their employees, the employee is on the receiving end of what will likely be perceived as dissatisfaction with their job performance.

In a session at WorldatWork’s 2021 Total Rewards Conference and Exhibition, Tamra Chandler, principal at Ernst & Young LLP, and Laura Grealish, senior manager at Ernst & Young LLP, expressed their desire to redefine the term feedback as well as the concept of performance management, emphasizing its significance in the rewards equation.

To set the stage for the presentation, Chandler detailed her various research on the topic of performance management. What she found is that there is no sound evidence that performance management actually drives performance and, she noted, there’s an argument to be made it actually lowers performance.

At the heart of this research, Chandler said she came across eight fatal flaws with traditional forms of performance management, namely the process of end-of-year performance reviews. One of the eight fatal flaws was that “nobody remembers the good work,” pointing out that performance reviews general emphasize the negative more than the positive. Additionally, the mentality of most managers is to approach performance reviews in a balanced way — providing an equal amount of negative and positive feedback.

The problem with this approach, Chandler said, is that human beings are hardwired to process negative feedback more than positive feedback. Thus, the bad feedback ends up outweighing the good feedback, and that negativity tends to foster lower levels of engagement.

Chandler’s research also found that fairness and standardization in ratings and the judgment of performance cannot be achieved because “humans are not machines.” Performance reviews fall victim to “rater bias,” in that 61% of performance ratings are generally a reflection of the rater and not the ratee.

“Once you take error out of that, you’ve got about 20% left that’s really about the individual being rated,” Chandler said.

Chandler discerned that there are several key myths within performance reviews that organizations must move away from:

  • We can fairly and equitably assess people on a pre-determined scale.
  • Human performance of a group of people adheres to a bell curve.
  • We can discern incremental differences in performance across a diverse team of people and roles.
  • A single person holds the answers to an individual’s performance.

Lastly, Chandler posited that pay-for-performance does not deliver improved performance. Her research found that extrinsic motivations do not create sustained performance as well as a few myths around the practice:

  • A small percentage difference in merit equals pay-for-performance.
  • Applying merit-based pay models equates to staying true to market pay.
  • Annual bonuses have a sustaining impact.


Changing the Definition of Feedback 

To counter the eight fatal flaws of traditional performance management, Chandler and Grealish identified eight fundamental shifts that need to occur. Three key changes:

  • Change your focus: shift from past performance to future capability
  • Welcome more voices: shift from a chosen few to diverse input and rich dialogue, as this will reduce bias and increase utility
  • Get real with rewards: shift from pay for performance to pay for capabilities, meaning growth and recognition should be focused on more in the rewards model.

 All of this starts with a new approach to feedback and adjusting the definition of the term to reflect what it should actually mean.

“Feedback has such a bad brand,” Grealish said. “We have to redeem feedback. We have to change the way it’s experienced, the way we think about it and all of the goodness it offers us as part of our rewards portfolio and move away from the things that have limited people’s engagement and experience.”

Grealish and Chandler offered this new definition: Clear and specific information that’s sought or extended with the sole intention of helping ourselves and others improve, grow or advance. “When we reboot the definition, we can let go of all the negative descriptors,” Grealish said.

By lowering this fear of feedback and elevating trust in the process it will lead to 74% less stress, 50% more productivity, 60% more joy, 70% more purpose and 50% more retention, according to neuroscience research by Paul Zak. Grealish also emphasized the importance of managers and people leaders to actively seek feedback and input from their employees to increase this trust.

Employers, Grealish and Chandler said, should adhere to three “fabulous Fs”:

  • Fairness: stepping away from bias, judgment and assumptions.
  • Focus: addressing one thing, good or bad.
  • Frequency: a quick observation, delivered without pomp and circumstance, will have more impact than tedious, formal conversations.

Delivering feedback in a more equitable, focused and frequent way will maximize its effectiveness. As it relates to focus, Grealish noted that how you deliver feedback is an integral part of the process. Identifying one thing for an employee to focus on that will elevate them is much more effective than identifying something an employee has done wrong without additional guidance. It’s also important to provide constant feedback, rather than waiting for an annual or semi-annual review to address it.

“Don’t give someone feedback on something from six months ago that they can’t fix now,” Grealish said.

Lastly, Grealish and Chandler said it’s imperative to focus on the good stuff and that the most outdated approach in leadership is to focus on weaknesses and fixing them instead of giving some of that space to strength.

“We spend way too much time on evaluation and assessment and way too little on development and growth,” Chandler said.  

Gallup’s State of the Global Workplace study found that 67% of employees whose managers focus on their strengths are “fully engaged,” and when managers focus on their weaknesses, it drops to 31%. Additionally, an IBM Work Trends study found that six times more positive feedback is given in high-performing teams in comparison to average teams. Low-performing teams share two times more negative feedback than the average.

Grealish and Chandler reiterated that incorporating this new model of feedback into performance management practices is free of cost and will actually elevate performance. But it requires a shift in mentality about what the actual goal of providing feedback is or should be.

“Our words have the power to inspire, to unlock potential, to lift us up instead of knocking us down,” Chandler said. “If that doesn’t get you onboard with fixing feedback, nothing will.”


Relevant WorldatWork Resources


About the Author

Brett ChristieBrett Christie is the managing editor of Workspan Daily.

About WorldatWork

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