PerformancemanagementInfographicAccording to the Society for Human Resources Management, the price of replacing a valued worker can cost as much as 50 to 60 percent of an employee’s annual salary. The challenge to retain employees is an ongoing issue for many human resource professionals.

And while using annual reviews has long been seen a main tool to evaluate employee satisfaction, a surprising new survey we sponsored indicates that this may no longer be enough.

We interviewed 2,800 employees from various industries about their overall satisfaction with their company’s current employee review practices in terms of frequency and effectiveness.

The majority of respondents (63%) indicated that they were not planning to stay with their present employer. Among the reasons provided by them, most suggested that a lack of consistent feedback and encouragement was a key factor in their decision to leave. In fact, 60% reported the performance appraisals had little impact on their job.

“We definitely see this as a wake-up call for human resources departments,” said Performance Reviews founder Jeremy Reis. “The results indicate the standard paradigm of annual reviews no longer meets the needs of today’s business climate. Employees are looking for meaningful interactions with their management team more often than once a year.”

Replacing employees is costly for employers. Creating an employee retention plan combined with the performance appraisal process can help retain key employees and decrease turnover.

Download Infographic of Survey Results (pdf | jpg)

Report Summary

The majority of respondents (96%) indicated that their employer has some kind of employee review process in place. Despite this, many of the individuals expressed frustrations on how effective this practice is in regards to overall employee development.

While nearly one-third of the reviews (27%) takes place only once a year, many who responded said that they actually desired more frequent feedback in order to remain connected to their company’s objectives.

Key Areas of Opportunity:

Effectiveness of Performance Review Process:

  • 22% of employees don’t understand how their job relates to the performance management process
  • 52% of respondents state the performance review process takes too long in terms of time and paperwork
  • 32% of those surveyed say that feedback provided has little effect on their job performance (either due to the perception that the process is driven by HR or is part of the job)

Potential Use of Review to Retain Employees:

  • 63% of respondents don’t believe they will stay at their current job for their career.
  • 48% of respondents indicated that they would stay at their present employer if they were made to feel appreciated by their managers and coworkers.


  1. Provide employee feedback more frequently than once a year
  2. Engage team in value of performance management process, incorporating employee development and training in part of review.
  3. Use reviews as a means to express appreciation for personnel to help with staff retention.


Participant sample included 2,800 employed professionals. 800 respondents identified themselves in a supervisory role.  In terms of tenure, the majority (72%) have been employed a minimum of 3 years at their present company.

Download the 2014 Performance Management Survey