Improving Employee Performance — Reviews With Real Impact
December 11, 2025 – As organizations confront a tougher operating climate and rising expectations on leaner teams, many are taking a hard look at how they keep people engaged and performing at their best. According to Gallup’s State of the Global Workplace report, after several years of gains, last year saw global employee engagement fall to 21 percent. When employee motivation declines, organizational productivity suffers. In fact, Gallup estimates that low productivity cost the global economy $438 billion last year.
Why does employee motivation seem to be stagnating? Following the widespread work-from-home phenomenon, the employee burnout phase, and the changes around employee expectations for work-life balance, new workplace norms have evolved, according to a new report from Pedro Hipólito, partner at IMSA Search Global Partners Portugal and Argo. “Across the globe, we see a hiring slowdown and simultaneously, companies are demanding more from their strongest employees in an attempt to boost productivity with fewer people,” he said. “As companies wrestle with their talent strategies, they are reassessing their approach to performance management.”
“Companies are evaluating the effectiveness of their performance assessments,” said Mr. Hipólito. “They want to be sure their assessments are inspiring their employees, motivating them to do their best, building morale, and strengthening overall productivity.” A McKinsey & Co study of 1,200 employees from around the world, conducted in 2023 and 2024 in companies with 100 to 100,000 employees, among employees across a range of positions and industries, on the subject of performance management, reveals what motivates employees today.
In recent years many companies moved away from results-based metrics toward evaluations that incorporate assessments of employees’ processes and adherence to company culture and norms. This was part of an attempt to give employees the sense that they were being evaluated in a more holistic manner. Some companies streamlined goal setting and formal reviews, separated compensation conversations, or eliminated ratings entirely. However, McKinsey’s survey revealed that employees prefer results-based analysis.
Process and culture-based assessments are seen as more subjective and ultimately, less fair. “To address this, survey your employees to understand their perceptions about the company’s current assessment practices,” Mr. Hipólito said.
Related: The Culture Edge: Driving Enterprise Performance
Employees feel more motivated when they have individual and team goals and when they can see how both correlate with broader company goals, according to the IMSA report. “Employees feel even more inspired when they have a role in: setting the goals, assessing the accomplishments, and adjusting the goals based on business environment and industry occurrences,” it said. “As a result, they feel vested, they own the goals and the accomplishments. To address this, ensure your company has a goal-setting structure that incorporates employee input and provides feedback loops.”
Employees Want More Than Reviews
Recent Gallup research concludes that “80 percent of employees who received meaningful feedback in the past week feel fully engaged.” In fact, employees want regular feedback on their performance. To address this, ensure all managers schedule regular check-ins with employees on their teams. “In these sessions, managers should communicate about employee performance on specific projects and provide constructive feedback and future direction,” the IMSA report said. “If communication is open and regular, annual reviews will be less anxiety provoking. Annual reviews should be a two-way dialogue, giving employees the opportunity to ask questions about how they can strengthen skills, improve performance, and move towards their next goal.”
Human Capital as a Strategic Asset: Unlocking High-Performance Leadership in the C-Suite
As organizations face constant disruption and a rapidly evolving business environment, human capital is emerging as one of the most critical strategic assets. The ability to identify, recruit, and retain high-performance leadership at the C-suite level requires a sharp focus on both technical excellence and intangible leadership qualities. Hunt Scanlon Media recently sat down with Smooch Repovich Rosenberg, founder and CEO of SmoochUnplugged, to discuss how organizations can unlock the full potential of their executive talent.
In this context, Mr. Hipólito emphasizes that more and more companies are betting on real time feedback, moving away from annual reviews towards ongoing feedback loops and including more data sources, incorporating feedback from peers and managers to provide a more comprehensive view of performance.
While employees don’t seem to feel strongly about receiving ratings on scales or other frameworks, they do seem to be motivated by performance reviews delivered by a skilled manager. This seems to be an area of weakness for many companies with 34% of respondents in the McKinsey survey calling out their manager for a lack of skill. To address this, create and strengthen professional development and training programs that build performance assessment skills.
“More than half of employee respondents felt motivated when financial rewards were combined with non-financial rewards,” according to McKinsey’s study. Non-financial incentives might include greater control over workplace space and time, a more senior project role, or increased autonomy. Consider public acknowledgments such as: company-wide announcements, awards ceremonies, milestone recognitions, and social media features.
“Top-performing companies want to be sure they are generating assessments that are inspiring their employees, motivating them to do their best, building morale, and strengthening overall productivity,” Mr. Hipólito concluded. “We help them find leaders who recognize the importance of performance assessments to motivate their teams, boost productivity, and drive success.”
IMSA Search Global Partners is an international executive search network with 25-plus member countries and over 50 offices across Europe, the Middle East, Africa, Asia, and the Americas. Members of the IMSA International Executive Search network are all boutique search firms.
Related: Exploring the Impact of Culture & Diversity Initiatives on the Search Process
Contributed by Scott A. Scanlon, Editor-in-Chief and Dale M. Zupsansky, Executive Editor – Hunt Scanlon Media
