Your employees crave feedback. They want to know when they do something well. They also want to know how they can improve. In fact, according to a recent survey, 75% of employees believe feedback on their work is valuable. More than 62% would like feedback weekly or even daily. Despite this, only 33% of small businesses report that they provide regular verbal feedback to their employees. According to SCORE, a national network of volunteer mentors for small businesses, nearly half of small business employees report that they don’t receive any feedback from their managers at all.
This is a major missed opportunity for small businesses. Regular employee feedback is critical to driving employee engagement. Higher engagement leads to higher levels of creativity, productivity, and profitability. Low engagement drives the exact opposite. According to a 2022 Gallup poll, employees who are not engaged or who are actively disengaged cost U.S. businesses around $500 billion each year. Since you probably aren’t aiming for low employee engagement, it seems pretty clear that you need to up your feedback game.
Now, I know what you are thinking: who has that kind of time? I had that same thought before I understood the difference between a good employee feedback loop and a bad one. Having come out of Corporate America, my view of employee feedback was based on that once-a-year sit down with your manager where you hear about all the things you did wrong plus a few that you did right. That’s a bad employee feedback loop. In fact, doing it that way doesn’t increase employee engagement. It leads employees to look for jobs elsewhere. It’s also a heavy lift for the manager who has to evaluate an entire year’s performance for multiple people in a few weeks. The better way to do this is on a regular cadence. And this becomes much easier to do and much more effective when your business is data-driven.
In my businesses, I offer formal feedback on a monthly basis and informal feedback at least weekly, if not daily. Everyone has goals for the quarter and for the year. On a monthly basis, we look at the data to see where each person stands relative to accomplishing each of the goals we’ve set. We look at what’s been accomplished and whether we are on track to hit the quarterly targets. And importantly, we explore what tweaks or additional support may be necessary. This feedback loop consists of both positive and critical feedback.
On at least a weekly basis, I make sure that I offer feedback on things that employees are doing well. I give recognition for those things that have impressed me and encourage employees to continue being creative, taking risks, and acting like owners. This is a feedback loop that mainly consists of positive feedback. Neither of these feedback loops adds much additional work to my plate. Most of the heavy lifting is done at the beginning of the year when we set the quarterly and annual targets. An added bonus is that with clear targets and regular feedback, employees begin to hold themselves more accountable because they are clear about what constitutes good performance and what does not.
So, if you want more motivated and productive employees, step up your feedback loop. Your bottom line will thank you!