Performance Management Statistics to Guide Strategic HR Decisions in 2026

Performance management is no longer a once-a-year HR exercise. It’s a strategic lever that directly influences engagement, retention, productivity, and overall business performance.

As organizations navigate hybrid work, shifting employee expectations, and increasing pressure to do more with less, leaders are taking a hard look at how performance is measured, discussed, and developed.

To help HR and business leaders make better decisions in 2026, this guide brings together the most relevant and credible performance management statistics from trusted research organizations, including McKinsey, Gallup, Deloitte, Gartner, SHRM, and others. The data reveals what’s changing, where traditional approaches continue to fall short, and which practices are most closely tied to engagement, trust, and sustained performance.

Use these statistics to benchmark your current approach. Pressure-test assumptions. And inform strategy conversations about feedback, goal-setting, manager effectiveness, and performance outcomes.

Adoption and Recent Changes in Performance Management

• Companies that focus on their people’s performance are 4.2 times more likely to outperform their peers, realizing an average 30 percent higher revenue growth and experiencing attrition five percentage points lower. From In the spotlight: Performance management that puts people first by McKinsey & Company.
• 95% of companies have a formal performance management process, and 88% have redesigned their system in the last 4 years (50% in the last 2 years). From Global Performance Management Report 2023 by The Talent Strategy Group.
• Nearly 49% of organizations still rely on annual or semiannual performance reviews as of mid-2020s. From The Evolving Landscape of Performance Management and Josh Merrill, quoted in SHRM.
• 5% of companies lack a performance management program, but over half of those plan to implement one within a year. From Global Performance Management Report 2023 by The Talent Strategy Group.
• 81% of HR leaders are still making changes and experimenting with their organization’s performance management efforts. From Gartner Says 81% of HR Leaders Are Changing Their Organization’s Performance Management System by Gartner.

Shortcomings of Traditional Performance Reviews

• 95% of managers are dissatisfied with their organization’s performance review system. According to The Evolving Landscape of Performance Management from SHRM.
• 59% of managers and employees see little value in their current performance management process. From Failed Performance Management: The Fix by Gallup.
• Only 2% of Fortune 500 CHROs “strongly agree” that their performance management system inspires employees to improve. From 2% of CHROs Think Their Performance Management System Works by Gallup.
• Just ~20% of employees say their company’s performance review process is “fair and transparent.” From Failed Performance Management: The Fix by Gallup.
• According to Gallup, only 14% of employees strongly agree that the performance reviews they receive inspire improvement. From More Harm Than Good: The Truth About Performance Reviews by Gallup.
• 61% of managers and 72% of workers admit they do not trust their organization’s performance management process. From 2025 Global Human Capital Trends by Deloitte.
• A company with about 10,000 employees spends around $35 million a year to conduct annual reviews. Quoted from Why Employee Performance Reviews Are So Old School, according to the Corporate Executive Board reported by The Washington Post.
• Review forms with too few questions (≤5) have the lowest completion rates, suggesting employees disengage when reviews feel superficial. Conversely, poorly structured long forms create fatigue and delay outcomes. The most effective systems strike a balance—neither overly sparse nor excessively complex. From 2025 State of Performance Management Report by PerformYard.

Feedback Frequency and Continuous Performance Management

• 80% of employees who say they have received meaningful feedback in the past week are fully engaged. From How Effective Feedback Fuels Performance by Gallup.
• About 48% of employees receive performance feedback only annually or semi-annually, and 8% say they never get feedback on their work. From Nearly Half Workers Only Receive Feedback on an Annual or Semi-Annual Basis, New Eagle Hill Research Finds by Eagle Hill Consulting.
• More than half of employees review goals with their manager only once per year or less. From 2% of CHROs Think Their Performance Management System Works by Gallup.
• 63% of workers want more “in the moment” feedback on their performance. From Nearly Half Workers Only Receive Feedback on an Annual or Semi-Annual Basis, New Eagle Hill Research Finds by Eagle Hill Consulting.
• 82% of employees say they feel valued when someone takes the time to provide feedback on their work. From Nearly Half Workers Only Receive Feedback on an Annual or Semi-Annual Basis, New Eagle Hill Research Finds by Eagle Hill Consulting.
• In hybrid workplaces, 38% of hybrid workers report that getting constructive feedback is a challenge (versus 21% of fully remote and 19% of on-site workers). From Nearly Half Workers Only Receive Feedback on an Annual or Semi-Annual Basis, New Eagle Hill Research Finds by Eagle Hill Consulting.
• More feedback is not always better. In organizations with 250+ employees, satisfaction scores peak when 20–40 people provide qualitative feedback. When feedback volume exceeds 200 contributors, employee satisfaction drops by 12%, suggesting feedback saturation can dilute value and overwhelm employees. From 2025 State of Performance Management Report by PerformYard.

Goal-Setting Quality and Alignment

• Employees set their own goals in just over 50% of companies, with managers setting them in about 40% of organizations. From Global Performance Management Report 2023 by The Talent Strategy Group.
• Individual goals are the most common (58%), yet employees receive team goals only 36% of the time and customer goals only 19% of the time. From 2% of CHROs Think Their Performance Management System Works by Gallup.
• In only 1 out of 10 organizations does someone other than an employee’s manager review the quality their goals. From Global Performance Management Report 2023 by The Talent Strategy Group.
• Nearly 80% of responding companies stated that goals need to be recorded in a technology platform. From Global Performance Management Report 2023 by The Talent Strategy Group.
• About 2/3 of companies use goals or objectives to structure what work will get done. Less than 10% use OKRs exclusively. From Global Performance Management Report 2023 by The Talent Strategy Group.
• Only 1/3 of companies have and execute a process to logically flow priorities through the organization. From Global Performance Management Report 2023 by The Talent Strategy Group.
• Employees who set 20–30 goals per year complete 38% more goals than those who set five or fewer. From 2025 State of Performance Management Report by PerformYard.
• Goal completion peaks when review forms contain 10–15 total questions, indicating focus and clarity drive execution. From 2025 State of Performance Management Report by PerformYard.
• By Year 4 of consistent performance management, goal completion rates rise as high as 92%, a 27% increase from early adoption stages. From 2025 State of Performance Management Report by PerformYard.

Engagement, Retention, and Performance Outcomes

• In 2023, only 33% of employees were engaged at work, and disengaged or actively disengaged workers cost the U.S. economy an estimated $1.9 trillion in lost productivity. According to The Evolving Landscape of Performance Management from SHRM.
• Companies that foster a strong culture of continuous feedback experience 14.9% lower turnover rates than those with no feedback culture. From The Secret of Higher Performance by Gallup.
• Highly engaged teams (often cultivated by good performance management practices) see 21% lower turnover and 78% lower absenteeism compared to disengaged teams. From What Is Employee Engagement, and How Do You Improve It? by Gallup.
• Employees who receive daily or almost daily feedback are 3.6× more motivated to excel than those who only get annual feedback. From How Effective Feedback Fuels Performance by Gallup.
• When employees have quarterly progress check-ins with their managers, they are 90% more likely to be engaged in their work and 2.1× more likely to perceive the review process as fair. From 2% of CHROs Think Their Performance Management System Works by Gallup.
• Regular feedback and recognition lead to tangible performance gains: teams that focus on employees’ strengths during feedback have 8.9% greater profitability and 12.5% higher productivity on average. From Seven Reasons to Lead With Strengths by Gallup.
• People who use their strengths every day are six times more likely to be engaged. From Seven Reasons to Lead With Strengths by Gallup.
• An employee who regularly applies strengths is 6.2× as likely to strongly agree they have the opportunity to do what they do best every day. From Seven Reasons to Lead With Strengths by Gallup.
• PerformYard’s longitudinal data shows that consistency compounds: employee satisfaction and eNPS scores rise steadily after adoption; review completion rates improve year over year; organizations using structured performance management see headcount growth that outpaces industry averages by Year 3. From 2025 State of Performance Management Report by PerformYard.

Trust, Fairness, and Evaluation Inputs

• Only 47% of employees strongly agree they know what’s expected of them at work. From 2% of CHROs Think Their Performance Management System Works by Gallup.
• PerformYard data shows this clarity gap widens as manager span of control increases: Every additional 5 direct reports reduces eNPS by ~2%; companies with 1–5 direct reports per manager have 7% higher eNPS than those with 15+; goal completion drops from 79% to 60% when managers oversee 20+ employees. From 2025 State of Performance Management Report by PerformYard.
• Just 6% of organizations surveyed say they’re doing “great things” using data/evidence to capture performance value while enhancing worker trust. From 2025 Global Human Capital Trends by Deloitte.
• If a manager primarily focuses on strengths, the likelihood the employee is actively disengaged is 1%; if focused on weaknesses, it’s 22%. From Seven Reasons to Lead With Strengths by Gallup.
• In 25% of cases, employees quit their job due to a lack of acknowledgment. From Bureau of Labor Statistics.
• 72% of employees stated their performance would improve if they received corrective feedback from their managers. From Your Employees Want the Negative Feedback You Hate to Give by HBR.

Manager Capabilities and Training

• Only 12% of leaders in organizations are highly effective at providing high-quality coaching and feedback, and just 23% excel at setting challenging goals for their team. From Global Performance Management Report 2023 by The Talent Strategy Group
• Fewer than 2 in 10 companies require their managers to undergo formal training in goal-setting, feedback, or performance review conduct. From Global Performance Management Report 2023 by The Talent Strategy Group
• 58% of organizations recommend 3 - 5+ coaching conversations but only 30% of employees receive those. From Global Performance Management Report 2023 by The Talent Strategy Group
• Employees say evaluations are most often based on manager observations (67%) and performance ratings (54%). From 2% of CHROs Think Their Performance Management System Works by Gallup.
• Managers spend an average of 210 hours a year in performance management activities. Quoted in The Annual Performance Review Dead based on CEB Research.
• Organizations with smaller teams, clearer goals, and structured feedback loops consistently outperform peers on engagement, goal completion, and satisfaction–indicating that manager enablement is one of the highest-leverage investments HR can make. From 2025 State of Performance Management Report by PerformYard.