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Study: The Risks Of Ignoring Employee Feedback

Many companies don't want to hear honest employee feedback (or employee complaints or even employee suggestions). And it's having a chilling effect on employee engagement.  Leadership IQ surveyed 27,048 executives, managers and employees and discovered...

  • Only 15% of employees believe that their organization Always openly shares the challenges facing it. And if an employee does believe that their company Always openly shares the challenges facing it, they're about 10 times more likely to recommend it as a great employer.
  • Only 24% of people say that their leader Always encourages and recognizes suggestions for improvement. And if someone does think their leader Always encourages and recognizes employee feedback about suggestions for improvement, they're about 12 times more likely to recommend it as a great employer.
  • Only 6% of people say that at their organization, good suggestions or valid complaints from employees Always lead to important changes. And if someone says good suggestions or valid complaints from employees do Always lead to important changes, they're about 18 times more likely to recommend the company as a great employer.
  • Only 23% of people say that when they share their work problems with their leader, he/she Always responds constructively. And if a team member says their leader Always responds constructively when they share their work problems, they're about 12 times more likely to recommend the company as a great employer.

STUDY METHODOLOGY
This study surveyed 27,048 executives, managers and employees about dozens of aspects of leadership and organizational life. Respondents were invited to complete an online assessment comprised of 68 questions, and respondents were drawn from a wide range of industries, ages, and organizational levels. The study was conducted from January-June, 2017. The average survey participant took 13 minutes to complete the assessment. For purposes of this study, we selected for analysis only those questions relevant to employee feedback. Respondents represented the following demographics. GENDER: Female (60.6%), Male (39.4%)-- COMPANY SIZE [EMPLOYEES]: 1-499 (40%), 500-4999 (30.8%), 5000+ (29.2%)—POSITION: Individual Contributors (38.1%), Middle Managers (49.9%), Executives (12.0%)

Companies Aren't Being candid About The Challenges They're Facing

One of the hallmarks of a truthful and candid company is the extent to which it openly shares its challenges. But currently, only 15% of employees believe that their organization Always openly shares the challenges facing it, while 21% say their organization Never openly shares its challenges.

Even if we combine those who say their organization Always (15%) or Frequently (20%) openly shares the challenges facing it, that still leaves nearly two-thirds (65%) of employees who feel their organization is not doing a good job openly sharing its challenges.

Whether an organization openly shares its challenges also has a large impact on employees' work experience. We asked employees whether they would recommend their company as a great organization to work for and discovered the following...

  • 63% of employees who think their organization Always openly shares the challenges facing it will strongly recommend it as a great organization to work for.
  • By contrast, only 6% of employees who think their organization Never openly shares the challenges facing it will strongly recommend it as a great organization to work for.

In essence, if an employee believes their company openly shares the challenges facing it, they're about 10 times more likely to recommend it as a great employer.

As we might expect, executives are much more likely than individual contributors to believe their organization Always or Frequently openly shares the challenges facing it (49% vs. 31%). Similarly, younger people are much less likely to believe that their organization Always or Frequently openly shares the challenges facing it. For example, only 30% of people ages 18-30 think their organization always/frequently shares its challenges, contrasted with 40% of ages 51-60 and 47% of ages 61+. Those who work for small companies think there's more open sharing of challenges (39%) than those at either medium (32%) or large (34%) companies. 

Too Few Leaders Are Open To Hearing Suggestions For Improvement

The most truthful cultures are those that are open to hearing ways that they can do better.  Unfortunately, only 24% of people say that their leader Always encourages and recognizes suggestions for improvement, while 16% say their leader Never does so.

Even if we combine those who say their leader Always (24%) or Frequently (23%) encourages and recognizes suggestions for improvement, that still leaves more than half (53%) of employees who feel their leader is not doing a good job on encouraging and recognizing suggestions for improvement.

This issue looms large for keeping people engaged at work. When we asked employees whether they would recommend their company as a great organization to work for, we found...

  • 62% of employees who say their leader Always encourages and recognizes suggestions for improvement will strongly recommend it as a great organization to work for.
  • By contrast, only 5% of employees who say their leader Never encourages and recognizes suggestions for improvement will strongly recommend it as a great organization to work for.

In essence, if someone thinks their leader Always encourages and recognizes suggestions for improvement, they're about 12 times more likely to recommend it as a great employer.

Middle managers are more likely to feel that their leader Always or Frequently encourages and recognizes suggestions for improvement (51%) than either individual contributors (42%) or executives (49%). People ages 41-50 and 61+ feel better about this issue (52% and 53%) than those aged 18-30 (43%), 31-40 (43%) or 51-60 (46%). Those in medium size companies say their leaders are more likely to Always or Frequently encourage and recognize suggestions for improvement (52%) than those in small (46%) or large (45%) companies.

Companies Aren't Acting On Suggestions Or Complaints From Employees

It's one thing to encourage and recognize suggestions for improvement, but it's quite another to actually act on those suggestions. And right now, only 6% of people say that at their organization, good suggestions or valid complaints from employees Always lead to important changes. By contrast, 25% say that good suggestions or valid complaints from employees Never lead to important changes.

Even if we combine those who say that good suggestions or valid complaints from employees Always (6%) or Frequently (19%) lead to important changes, that still leaves three-quarters of employees who feel that their organization is not doing well on this issue.

The implications for employee engagement and retention are significant. When asked whether they would recommend their company as a great organization to work for, we found...

  • 74% of employees who say that good suggestions or valid complaints from employees Always lead to important changes will strongly recommend it as a great organization to work for.
  • By contrast, only 4% of employees who say that good suggestions or valid complaints from employees Never lead to important changes will strongly recommend it as a great organization to work for.

If someone says good suggestions or valid complaints from employees Always lead to important changes at their organization, they're about 18 times more likely to recommend it as a great employer.

As might be expected, executives are much more likely than individual contributors to believe that good suggestions or valid complaints from employees Always or Frequently lead to important changes at (41% vs. 21%). Younger people are much less likely to believe that good suggestions or valid complaints from employees Always or Frequently lead to important changes. People ages 51-60 and 61+ feel better about this issue (30% and 30%) than those aged 18-30 (22%) and 31-40 (22%). Those who work for small companies are likely to believe that good suggestions or valid complaints from employees Always or Frequently lead to important changes (31%) than those at either medium (23%) or large (22%) companies.

Too Few Leaders Respond Constructively To Employee Problems

A key to having a truthful company culture is having leaders that can respond to difficult issues constructively. But as the data shows, only 23% of people say that when they share their work problems with their leader, he/she Always responds constructively, while 17% say their leader Never responds constructively.

Even if we combine those who say that their leader Always (23%) or Frequently (22%) responds constructively, that still leaves more than half of employees who feel that their leader doesn't consistently respond constructively when they share their work problems.

Once again, there are significant implications for employee engagement and retention. When asked whether they would recommend their company as a great organization to work for, we found...

  • 60% of employees who say that their leader Always responds constructively when they share their work problems will strongly recommend their company as a great organization to work for.
  • By contrast, only 5% of employees who say that their leader Never responds constructively when they share their work problems will strongly recommend their company as a great organization to work for.

If someone says their leader Always responds constructively when they share their work problems, they're about 12 times more likely to recommend the company as a great employer.

Middle managers (48%) and executives (49%) are more likely to feel that their leader Always or Frequently responds constructively when they share their work problems than individual contributors (41%). People ages 41-50 feel better about this issue (51%) than those aged 18-30 (38%), 31-40 (41%) or 61+ (43%). Those in medium size companies are more likely to feel that their leader Always or Frequently responds constructively when they share their work problems (51%) than those in small (44%) or large (43%) companies.

IS YOUR COMPANY CULTURE A FEEDBACK CULTURE?

A feedback culture is one where information is both given and received without defensiveness, up, down and sideways through the organization. With an employee engagement survey, any company culture could measure whether they're truly a feedback culture by asking survey questions like:

  • At this organization, good suggestions or valid complaints from employees lead to important changes.
  • This organization is open to using ideas/practices from outside our company to help improve our performance.
  • Leadership encourages and recognizes suggestions for improvement.
  • I can report an error or a situation that puts quality at risk without causing problems for myself.
  • I have access to information that shows me whether this organization's performance is where it should be.
  • This organization is open to using ideas/practices from outside our company to help improve our performance

If you took the employee survey data from any one of those questions, you would quickly pinpoint whether your company culture actually welcomes feedback. For example, using one of the charts from earlier in the study, we can see the results for the question we use in employee surveys, "At this organization, good suggestions or valid complaints from employees lead to important changes."

Only 6% of people say that at their organization, good suggestions or valid complaints from employees Always lead to important changes. By contrast, 25% say that good suggestions or valid complaints from employees Never lead to important changes.

Does that look like a feedback culture? Absolutely not; if anything it looks like the OPPOSITE of a feedback culture. Think about how employees would feel if this was their company culture. Any employee would learn quickly that there's no point in offering suggestions or feedback, because it's likely going to be ignored. Or worse, giving effective employee feedback might actually harm their career.

toxic POSITIVITY CAN RUIN A FEEDBACK CULTURE

Do you ever feel like your organization's leaders are trying too hard to pretend that everything's just fine? Or that companywide memos avoid any topic that can't be positively spun? Or that uncomfortable conversations are muzzled with warnings like "let's not dwell on the negative"? 

If any of those scenarios feel familiar, you've likely suffered toxic positivity.

"Toxic positivity is an excessive and distorted form of positive thinking. It's putting a positive spin on all experiences, no matter how dire or tragic," explains clinical psychologist Dr. Andrea Burgio-Murphy. "For example, you could be experiencing toxic positivity when a friend or boss minimizes or refuses to acknowledge your negative feelings or critical feedback. Or perhaps they go further and try to spin your dire situation in a positive way, like 'this is a blessing in disguise' or 'all things happen for a reason.'" 

We saw a chart earlier that showed to what extent employees felt their leader responded well to hearing employee feedback about problems in the workplace. Disturbingly, only 23% of employees say that their leader always responds constructively when employees share their work problems. 

Senior leadership desperately needs to hear employee feedback and customer feedback

In the famous study, Why The CEO Gets Fired, Board members revealed that financial performance is NOT the major reason why CEOs get fired. In fact, on the list of the top 5 reasons why CEOs get fired, two of the issues were related directly to customer feedback and employee feedback.

Reason #2 Why CEOs Get Fired--Ignoring customers (28%)
Many board members have close ties with, or are themselves, customers of the organization. And they overwhelmingly said that if a CEO ignores customer feedback, it not only undermines the business and revenue, but it significantly undermines board support. Board members said their test for whether the chief executive was sufficiently engaged in the business was the extent to which they evidenced intimate knowledge of customers, listened to customer feedback, and prioritized delivering excellent customer service. This was about a lot more than just conducting a customer satisfaction survey, it was about truly understanding and acting on customer feedback. 

Reason #4 Why CEOs Get Fired--Denying reality (23%)
Board members overwhelming said they could handle bad news and significant course corrections. What they couldn't handle was a CEO who was in denial and wouldn't accept honest feedback or bad news. Many board members felt that they were closer to the market, customers and employees than the ousted exec, and a significant percentage said they was far too insulated from frontline realities, including employee feedback about challenges in the business.

A quick note on 360 degree feedback

Using a 360 degree feedback assessment can be a great way to get honest feedback from employees, managers, peers and even customers. But it's not enough to gather the data, it also has to be accepted and embraced without defensiveness. 

Let's look at example from a 360 degree feedback assessment. Imagine that you're a leader who received this chart on your 360 degree feedback report about the extent to which you make timely decisions:

You can see from the 360 degree feedback data that YOU think you make timely decisions and your PEERS think you make timely decisions. But your DIRECT REPORTS view your decision-making less favorably and your BOSS does not think you make timely decisions. 

This is critical data, but what's your emotional reaction to this negative feedback? Are you redirecting feedback away from yourself and making this about your boss not understanding you? Does cognitive dissonance prevent you from accepting the negative feedback that your direct reports don't think your decision-making is fast enough? Employees and leaders who view honest feedback (and even constructive criticism) as a great chance to learn and grow will advance far faster than deniers and blamers. 

gathering feedback with an exit interview

An exit interview can be another great source of honest feedback, if it's conducted correctly. For too many organizations, conducting an exit interview is a task assigned to someone in human resources. But because a departing employee will likely need the company as a reference later in their career, most employees won't burn bridges and share truly honest feedback via an exit interview. But if you enlist help from outside the company, you can hear the truth about why your employee retention is suffering. Here are some real-life examples we heard recently:

  • How many staff need to get hurt before something good happens? Staff should not have anxiety about coming to work. I used to hear stories about how people knew every one of their customers and were concerned when they didn't see them. That has been replaced by their anxiety over having to deal with difficult people. This is related to a small percentage of the workforce. However, management should seriously focus on this. Empathetic emails from management are nice but these employees deserve action.
  • Hold staff who are underperforming accountable for their behaviors. There are staff who have been roadblocks in both work and attitude for in some cases decades without seemingly any negative consequence. This is demoralizing to staff who are giving their best effort but do not seem to see fair treatment. 
  • Our compensation is honestly a joke and a constant "joke" among many people I've talked to not only in my department but in others sharing other job postings for other companies. The employee recognition program we have doesn't even select our actual star team members.
  • We want to have a hand in the decisions that happen, and when we don't get a real voice in the changes that happen, they always end up confusing or destroying some system that keeps things working smoothly. It's easy to become jaded in the face of what seems like upper management that makes decisions without consulting the very people it impacts or should have the opinion involved in.

An exit interview can generate critical feedback; after all, it's from employees who quit. But even though it can be painful to hear, you'll notice in those actual examples that many of the complaints are fixable. Addressing even a few of the most common exit interview complaints could pay huge dividends in improving employee retention. Even though it can feel like negative feedback, it's also an incredibly powerful tool for improvement.

The need for CORRECTIVE FEEDBACK

Constructive criticism is generally given with the purpose of helping people learn from their mistakes so that they improve moving forward. At first blush, constructive feedback doesn't sound like much fun, but the irony is that employees actually want more constructive employee feedback. 

Leadership IQ recently surveyed more than 27,000 people, and among the dozens of questions, we asked people to rate the statement "Constructive feedback from my leader has helped me to improve my performance." Only 20% of people say that their leader will "Always" share constructive feedback that has helped to improve their performance. Meanwhile, 20% of people say that their will leader "Never" share constructive feedback that has helped to improve their performance. 

Even if we combine those who say that their will leader "Always" (20%) or "Frequently" (23%) share constructive feedback that has improved their performance, that still leaves 57% who feel that their leader has not done well on giving corrective feedback. 

Let this data sink in for a moment; 57% of people are essentially saying that their leader is not doing a good job delivering constructive criticism that will improve their performance. How much improvement would we see from employees if they received more or better constructive employee feedback? How many good people have quit because they didn't feel like they were showing improvement at their job (because they weren't getting effective feedback)? 

Even though it might seem like employees wouldn't want their leader giving them lots of constructive feedback, that's just not true. In this same study, we also asked people whether they would recommend their company as a great organization to work for. And here's the shocking finding: 

  • 59% of employees who say that their leader will "Always" share constructive feedback that has improved their performance will strongly recommend their company as a great organization to work for. 
  • By contrast, only 7% of employees who say that their leader will "Never" share constructive feedback that has improved their performance will strongly recommend their company as a great organization to work for. 

Essentially, if someone says their leader will "Always" share constructive feedback that has improved their performance, they're nearly 8 times more likely to recommend the company as a great employer. 

If you want customer feedback, start with these questions

What do customers want from companies? They want to be understood as individuals and not as a cookie cutter kind of approach. They want deep understanding, they want to be listened to, and they want to be deeply heard. They want transparency, to know where they're at in the process. Of course they also want truth, they want to know if things go wrong what happened, why and how we're actually going to fix it. 

If a company wants to deliver exceptional customer service, they'll need customer feedback about how well they're performing across those dimensions. 

A customer satisfaction survey is a fast and easy way to gather that customer feedback. But you'll need to move beyond a one-question survey like "I recommend ABC to others" or even a net promoter score.

For deep customer feedback, we need a customer satisfaction survey with far more nuance. Here are some customer satisfaction survey questions to get you started:

  • ABC Staff listen carefully to me. 
  • ABC Staff explain things clearly to me, they keep me informed and in the loop. 
  • ABC Staff follow through with their promises. 
  • If I shared criticisms or concerns with staff at ABC I know that they would respond constructively.
  • My choice to use this organization was a wise one.

If you're getting customer that sounds like "Yeah, they listened carefully to me, they explained things they keep me informed and always in the loop," then you've got signs of a deep customer relationship.

feedback about job performance is woefully inadequate 

A Leadership IQ study found that only 29% of employees say they "Always" know whether their job performance is where it should be and that well over half of employees "Never," "Rarely" or "Occasionally" know. One of the core functions of a leader is to provide continuous feedback about employees' performance. If that were happening, we'd see close to 100% of employees that know whether their job performance is where it should be. But the data shows clearly that this isn't the case.

The fact is, around nine out of ten managers have avoided giving constructive criticism to their employees for fear of the employees reacting poorly. And is it any wonder that an employee would react badly to getting constructive feedback when less than half of them know if they're doing a good job? If you don't know whether your job performance is where it should be, there's a good chance that you're not going to be happy when your boss comes up to you and bashes you with some negative feedback. Especially, if mangers only share feedback once a year during a performance review.

One of the ironies is that if leaders were giving continuous feedback, they could do it in small, bite-sized chunks and avoid the pain of the annual employee performance review.

Another Leadership IQ study found that only 13% of employees and managers think their organization's performance appraisal system is useful. And only 6% of CEOs think their performance appraisal process is useful. Why?

A whopping 96% of employees, managers and CEOs agree that a performance management process should differentiate high and low performers. But only 22% always think that their leader actually distinguishes between high and low performers.

Additionally, only 14% of employees believe that their performance review provides relevant and meaningful feedback. 95% of employees believe that an employee performance review should reference and cite specific events from throughout the year.

positive employee feedback is sorely missing

Only 28% of people believe that their leader always recognizes their accomplishments with positive feedback. Perhaps more disturbing is that 54% believe that their leader never, rarely or occasionally recognizes their accomplishments with positive feedback.

There are, sadly, still leaders who are reluctant to put much stock in positive reinforcement because they somehow think that it's doling out fluffy, feel-good compliments just for the sake of making someone feel good. 

But positive employee feedback isn't idly saying "Hey, thanks for showing up to work today." Positive feedback is a teaching tool that addresses the well documented psychological principle that says desirable behavior, when reinforced, tends to be repeated. It's taking the moments when employees evidence the job performance you want and sending them a clear message that says, "That thing you just did right there, right now, was really good. Please do it again." 

There's an important rule for giving positive employee feedback: Be Specific! Let's look at two positive feedback examples, one poorly-done and one well-done.

POORLY-DONE: "Great job on that report!"
In order to be effective, positive feedback must provide a clear picture of the performance that's being commended so the person knows to do it again. 

WELL-DONE: "It's great how you got this report done 3 days ahead of schedule and the client is really going to appreciate the extra data analysis you included."
This kind of meaningful, timely and specific feedback tells employees exactly what they did right, and exactly what they need to do to excel again.

As you can see in those positive feedback examples, specific and meaningful feedback doesn't just make employees feel great, it's also an incredibly effective way to improve their job performance.

How to get better employee feedback with youR employee engagement survey

Virtually every company conducts employee engagement surveys. But the research shows that only 22% of companies are getting good results from their employee engagement survey. What constitutes a good result? Either survey scores were low but they've improved dramatically, or they were high and they've stayed high. Anything else, like employee engagement hasn't changed significantly or scores have declined, would constitute a poor result.

Why are so few employee engagement surveys generating good results? Because most companies have the mistaken belief that the purpose of an employee engagement survey is to measure employee engagement. It's not; the purpose of conducting a survey is to surface employee feedback so that you can actually improve employee engagement.

Too many companies treat their employee satisfaction survey like they're 'just curious' and want to 'check-in' with the engagement of their employees. But engagement surveys are too time-consuming on the part of the employees answering the questions for this to be an exercise conducted 'out of curiosity.'

For example, imagine that you asked employees the question: "What's one frustration you have at work that you believe your manager has the authority to fix immediately?"

Adding that one question to your employee feedback survey will instantly generate hundreds or thousands of immediately actionable bits of employee feedback. In a recent Leadership IQ employee engagement study we asked that question, and here are some of the real-life responses:

  • Enforcing company policy to employees who are cutting corners, causing me extra work
  • Extending the work till midnight continuously without a break
  • Biggest frustration is my boss wants our department to fix all the broken processes instead of pushing back on the department that owns the process
  • Sloppy deliverables that must be fixed by others at the last minute
  • Number of meetings I'm expected to attend
  • Stop withholding information and controlling contacts
  • Too many unnecessary external meetings

If you want to know what's hurting your employee experience, gathering feedback about employee frustrations is a fast and easy place to start. Of course, you'll need to take that employee feedback and fix those issues, but it's far easier to fix the problems once you know exactly what they are.

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