Why Does Feedback Fail? How to Invigorate Your Performance Management Process.

Only 35% of New Zealand employees say they receive ‘helpful feedback often enough to stay motivated’. It’s a clear signal that performance management isn’t quite hitting the mark.

In theory, performance management should be one of the most powerful tools in your HR arsenal. In practice? It’s often treated as a box ticking exercise that’s disconnected from real development, engagement or retention.

So, what does the data say? According to feedback from over 500 New Zealand employees in our latest ELMO Employee Sentiment Index (Q2 2025):

• Only 30% of employees say their organisation has a formal and consistent performance management process.
• Just 34% strongly agree that their goals and expectations are clear.
• A worrying 18% say they rarely or never receive helpful feedback.

So what does this tell us? These metrics indicate that the signal’s being lost and that there’s a disconnect between employer and employee that should be addressed.

Why’s your feedback falling over?

Here’s where many performance management processes stumble:

1. It lacks alignment with business priorities

When goals are set in isolation from broader business outcomes, employees lose sight of the broader point of their role. This kind of disconnect saps employee motivation, causes performance issues and manager anxiety, and lacks the punch necessary to co-ordinate better business outcomes.

2 It’s episodic, not ongoing

All too often, feedback only happens once or twice a year, with months of silence in between. This means there’s no solid mechanism to correct course, reinforce goals, or recognise wins in real time.

3. It’s focused on the past, not the future

You’ll often find that much of the review process is retrospective. They’re a quick glance in the rearview mirror rather than a forward focused conversation about staff development and growth.

4. It’s inconsistent across teams

Even when the process is consistent, it’s often applied quite unevenly across the organisation. Some managers go above and beyond, while others do the bare minimum. Some are quite formalised, but many can be ad hoc and run on differing structures. This kind of inconsistency creates sporadic outcomes and dubious data for HR.

5. It doesn’t provide dependable data

Well structured performance management and feedback cycles should provide HR and the business with consistent data. This data can then be used to identify brewing issues, reward outstanding performance, and inform decisions around further learning, pay, role correction, or intervention.

The business cost of poor feedback

Poor performance management has ripple effects across the whole business. The good news is that 70% of employees believe their performance is assessed fairly and transparently, but only 26% strongly agree. This means that there’s room for growth here!

Some real costs to consider when feedback fails:

• Engagement drops.
  When people don’t know where they stand or how to improve, they disengage. In fact, just 26% of employees say they feel strongly engaged and motivated.
  
• Top talent walks away.
  High performers want to grow and appreciate clear pathways for advancement and recognition.
  
• Burnout rises.
  Without clear goals and regular reinforcement, work becomes reactive and overwhelming. It’s no coincidence that 48% of employees are reporting burnout.
  
• Leaders miss insights.
  Without reliable performance data, it’s hard to make informed decisions on promotions, learning, or workforce planning.
  

When you have almost half of Kiwi employees (48%) experiencing burnout in the last 3 months, feedback isn’t just about productivity, it’s also about protecting your people’s wellbeing.

What does good feedback look like?

Here’s what high performing organisations do differently:

• Make feedback frequent and expected.
  Regular check-ins keep feedback alive. Think monthly convos, not just formal yearly rituals.
  
• Connect goals to business impact.
  Clear alignment between individual outcomes and strategic objectives helps people see the bigger picture.
  
• Use data to track and improve.
  Real-time insights (from both managers and peers) should help HR leaders understand how performance is trending, and where to intervene.
  
• Pay mind to psychological safety.
  Feedback shouldn’t feel punitive or create fear! When employees feel safe, they’re more likely to ask for guidance and act on it.
  
• Assist managers, don’t burden them.
  The best performance and feedback tools don’t just track reviews, they also guide managers through the process with templates and reminders.
  

How Performance Management software drives better business outcomes

Effective performance management software like ELMO Performance aligns people with purpose as well as strengthening engagement and underpinning better decisions. It’s not just about the appraisals themselves, it’s about unlocking real potential for all involved.

Here’s how ELMO Performance makes a difference:

• Aligns goals to business strategy.
• Builds a culture of accountability.
• Enables better decisions.
• Reduces admin and increases impact.
• Supports retention and growth.

With ELMO Performance, you turn reviews into results and connect performance with progress and purpose.