Why are top performing companies above the herd? It’s because they’re always looking for ways to be and do better, and have done that before. Feedback provides valuable information that's needed to make crucial decisions. Effective feedback stimulates learning and has a huge value across all parts of the company.
So how valuable is feedback?
The return on investment of building a feedback culture is more than you may think. From raising engagement and productivity to increasing workforce morale and motivation, the benefits of embracing a culture of feedback are endless.
Here’s what you need to know about the importance of a feedback culture and how it can be used to your advantage.
Feedback boosts productivity
No one likes to sit at a desk and feel like they’re doing mindless, meaningless work. Employees are more productive when they feel engaged, and engagement is higher when someone notices and cares about their work. How does someone know that they’re doing good (or not so good) if someone doesn’t tell them?
Feedback is key to optimizing performance. By clarifying goals and guiding employees to achieve them, you’ll notice an uptick in productivity. It’s much easier to complete a task when you know what the purpose and goal is, and regularly get an outsider’s perspective to what is going well and what improvements could be made. That's how people know what adjustments to make.
A research found that 69% of employees say they would be more productive if they were better recognized. People who want to improve at their craft also want to get feedback – both reinforcing and redirecting.
Feedback reduces absenteeism
If employees feel like they don’t have any direction or have no idea if the work they’re doing is good enough, they’re more likely to be disengaged and uninterested. Feeling uncertain about your work or not having much direction has a direct link to absenteeism.
A Gallup study found that highly engaged workplaces have 41% lower absenteeism. An improvement in absenteeism alone can yield annual savings of thousands of euros per employee.
The fact is that people want to do meaningful, purposeful work, as well as they can. Feedback helps people stay motivated and keeps them on the path to success.
Lower employee turnover
It's a tragedy every time a growth-minded employee leaves a company because they didn't get enough feedback. It's crazy that feedback dissatisfaction keeps appearing over and over in wellbeing questionnaires. With millennials and gen Z becoming more prominent, the problem is only going to get bigger.
Employee feedback loops are critical for employee retention. Regular communication with employees creates a healthy, energizing work culture. Most employees thrive when they're regularly given an opportunity to give and receive feedback to each other, their team, and the company.
A lack of feedback can leave employees feeling unheard and unengaged. In turn, they're more likely to head to greener pastures where they feel like they're in an environment where they can improve their skills and results.
Nowadays everyone knows that high employee turnover is expensive and the cost of hiring a replacement isn’t cheap. In fact, one study found that turnover can cost up to 33% of an employee’s annual salary.
More efficient onboarding due to better guidance
Onboarding is a crucial part of the hiring process. As new employees are hired, you want to introduce them to the company’s mission, vision, values, and culture. This is also a great time to welcome feedback from new employees.
There’s a huge benefit of deliberately asking for feedback from a new, unbiased employee. They see things in a different light and can provide feedback from a different vantagepoint.
Feedback can also make the onboarding experience more meaningful. Enabling new hires to get up to speed more quickly reduces hiring costs and wasted time.
When new employees are given the information they need up front, they can more easily adapt and begin contributing to the mission.
Bottom line
Investing in building a feedback culture is well worth the time and effort. Research has shown that feedback boosts productivity, reduces absenteeism, decreases employee turnover, and improves the onboarding process.
Ensuring that people give and receive feedback is crucial to your company’s sustained success. When employees have direction and are engaged, they feel valued and that the work they’re doing is meaningful.
Our estimations suggest that with a moderate investment, a few trainings and a tool to support frequent high quality feedback activity, a company can quickly save up to €4,000 per employee each year.
Talk with us to learn more.