The dreaded performance review draws the ire of employees and managers alike. Workers fret that reviews fail to capture the full scope of their work, or that they are an unfair assessment of their performance. For managers, reviews can be a time-consuming nuisance and involve the challenging task of delivering tough feedback.
But a new study from Cornell University finds that the structure of the performance review can have a huge impact on how workers feel about them.
Over the last decade, a number of companies have revamped their performance reviews, seemingly to address the long-standing pain points. The likes of Goldman Sachs and Morgan Stanley have moved away from numerical ratings, while tech companies like Microsoft eliminated stack rankings (reviews that essentially rank employees against their colleagues) and Adobe eliminated reviews altogether. (More recently, however, tech giants like Google and Meta have actually pushed for more stringent evaluations of employees and, in turn, lower ratings.)
The Cornell researchers examined how the shift away from numerical reviews has influenced employee sentiment. Emily Zitek, a professor of organizational behavior, and her coauthors analyzed how employees feel about performance reviews that emphasize “narrative” or qualitative feedback over numerical rankings. The team looked at three different performance review formats: those that exclusively used either numerical ratings or narrative feedback, and those that employed a mix of both.
What the researchers found overall was that employees believed performance reviews were, in fact, more fair when they did not have numbers attached and were purely narrative-driven.
“Even if they’re given kind of average numbers versus wording that says they were very average, it feels more fair if they just see the words and not the numbers,” Zitek says. “So we thought that was very interesting. We were originally expecting the combined feedback to still be viewed positively, but people didn’t like the numbers within that either.”
Employees were also more likely to want to improve their performance if they received narrative feedback—and, more notably, if they felt their review was fair. “Obviously, one of the goals is improvement,” Zitek says. “[If you’re] just giving people numbers, they don’t know as much about what they need to do to perform better.”
But there was an exception: If their reviews were very positive, then people perceived them as fair, regardless of format.
“People love knowing if they’re at the top,” Zitek says. More average ratings, on the other hand, seem to betray an employee’s self-perception—which is why a more middling review feels more palatable if there is no number attached.
“Psychology research has shown a lot of people think they are above average, or that they’re doing better than they are,” Zitek adds. “When they get narrative-only feedback, they’re able to maintain that view because there’s no explicit information showing that they didn’t do well.”
That’s one of the reasons Zitek and her coauthors argue there is still a place for numerical ratings, in spite of the study’s findings: If one of the goals of performance reviews is to determine raises and bonuses, then including numbers-based feedback can be important—and arguably more fair. “If employees are deluding themselves that they’re performing really well, sometimes it helps to have the number,” she says. “Sometimes you want employees to realistically know where they stand. And yes, they’re going to be mad about it; they’re not going to think it’s fair. But that could be important.”
The reality is that many companies still rely on numerical ratings to make decisions about compensation—and if they stop using those metrics in reviews, they may still utilize a ranking system without informing employees. “If the company is going to want some kind of number anyway, it seems worse to not tell the employee that number,” Zitek says. “And that’s what some companies are doing—they have shadow rankings behind the scenes. They don’t tell them to the employees, and then employees are like, ‘Wait, why did I get a smaller bonus than this other person?’”
Regardless of format, one of the most frequent critiques of performance reviews is that they are vulnerable to bias. Even if reviews are standardized across a company, your performance rating can be impacted by a number of variables and often hinges on how your manager or team approaches reviews. A narrative component can help address this issue—but that still depends on how managers are trained and whether they understand the value of proffering real feedback.
To ensure managers actually commit to the review process, Zitek says, it’s important for employers to emphasize the purpose of providing thoughtful feedback.
“People are more willing to do things if they know why they’re doing it,” she says. “So it could just be making an effort to convince the managers [that] this isn’t just another box to check.” It’s also crucial that managers are trained on how to give constructive performance feedback, she adds—something that many employers fail to do effectively—and that they offer it at a more regular cadence so employees are not surprised when their review rolls around.
“Feedback can be uncomfortable to give sometimes,” Zitek says. “But it’s more uncomfortable later if they don’t get promoted and don’t understand why—and they could have been performing better the entire time if they were given that feedback.”