How qualitative performance evaluations give businesses a competitive edge

Employees want to know how they are performing at their jobs and where they can improve – it is the type of feedback that can truly elevate a company’s performance.

However, as companies become increasingly data-driven, quantitative performance has understandably become the key benchmark of success in the workplace. After all, nearly every aspect of business operations — from sales figures to key performance indicators (KPIs) — can be tracked and measured for precise evaluation.

Related: How the best companies are attracting the talent they want

Quantitative performance is, without a doubt, one of the best ways of reviewing an employee’s work, simply because it is completely objective. The numbers don’t lie; the feedback is black and white, and it immediately reveals how much your employees are either excelling or coming up short. This evaluation is also not subject to interpretation or personal perspective, so the recipient is much more likely to be receptive to the resulting feedback.

Qualitative performance, on the other hand, is measured by a manager’s observation — without any statistics or metrics to draw from. It focuses on soft skills like communication, teamwork and adaptability, and can be a useful benchmark for positions where job success is measurable not by hard data but by other abstract qualities.

It's even more significant during the pandemic era. And here’s why.

Hybrid work models have become the preferred workplace arrangement for employees in the COVID-19 era, and it is here to stay, even after the pandemic. And the more it becomes the norm, organisations need to start prioritising, if they have not already done so, well-being within the employees’ life cycle at work.

According to our Talent Trends 2022 report, The Great X, while 54% of respondents believe mental health and well-being should play a part in employee performance measurement and appraisals, only 32% of companies have made adjustments to performance measurement and appraisals to account for the mental health and well-being of their employees.

Supporting the well-being of employees through their performance evaluations not only contributes to their overall well-being, it becomes part of the fabric of work culture. Qualitative performance evaluations take into account just that.

Now, even when you can measure performance, a standout employee usually does much more than just accomplishing individual objectives that the company sets for them. These intangible factors — to do with behaviour, attitude, showing ambition or personality traits — are what will separate your best employees from the rest.

What should you look for in qualitative performance reviews, and why?

1. Communication

Effective communication is vital to an organisation’s ability to operate smoothly and be productive. The ability to articulate needs, and exchange information and ideas — whether in person or virtually — is a critical aspect of getting any job done.

All the best collaborations are the result of great communication. A company with staff who can navigate this two-way street effectively is one step closer to improved productivity and success, a more positive workplace culture and better employer branding overall.

2. Initiative

Going above and beyond one’s job scope shows a willingness on your employee’s part to be a valuable team member. Proactive acts such as helping struggling teammates, solving problems quickly or demonstrating critical thinking are qualities that show you exactly which employees can rise above any challenge by recognising opportunities to act or take charge.

3. Leadership

Great leaders do more than nudge profits further up the charts. There are many qualities of effective leaders that can’t be assessed using data; from thinking positively and proactively to encouraging employee growth and development.

These are the people who best personify your company culture – and can motivate and mentor your team and the rest of the workforce to surpass their own expectations. Also, note that your best leaders may not even be in leadership or manager positions. As author John C Maxwell puts it: Leadership is not about titles, positions or flowcharts. It is about one life influencing another.

4. Empathy

Displaying empathy not only creates a safe and understanding environment for employees but also boosts morale and productivity. The impact this has on workplace relationships and performance is significant. According to famed psychologist Daniel Goleman, empathy is one of the five key components of emotional intelligence — a vital leadership skill.

Research has shown that a lack of empathy can cause employee turnover. As many as 83% of Gen Z workers would choose an employer with a strong culture of empathy over one that offers a slightly higher salary. The same percentage would also consider leaving their current organisation for a similar role at a more empathetic company. Appreciating employees who demonstrate this important quality can help immensely with retaining staff in your organisation.

How the best companies measure performance

It’s not surprising that successful companies like Google don’t measure performance the usual way. For a start, the tech giant holds two reviews annually instead of the usual one — a comprehensive version in November and a follow-up in March or April. This format encourages continuity and progress – and doesn’t require managers to carry out a 12-month retrospective, which might not necessarily be an accurate representation of the full year’s performance.

Instead of top-down reviews, Google also encourages peer performance reviews, giving a more balanced overview of everyone’s progress while eliminating subjective biases. The multi-national tech company has even coined “Googliness” as a metric for its staff’s passion and drive, which explores qualities such as presence and leadership, as well as problem-solving skills. Focusing on these strengths allows the firm to define clearly what its employees are doing right, and is an opportunity to recognise those who have surpassed quantitative, measurable goals.  

Partly through implementing these types of strategies, Google has continued to be known for its employee satisfaction — as many as 80% of the company’s workers say they are either extremely satisfied or fairly satisfied with their job.

At American streaming platform Netflix, personality and cohesion matter as much as benchmarked success. The company’s CEO Reed Hastings famously noted that he doesn’t tolerate “brilliant jerks” because “the cost to effective teamwork is too high". Instead, Netflix aspires to develop a “Dream Team” — a group in which all of its employees are both extraordinary at what they do and are highly effective collaborators. This approach to teamwork and culture encourages the pursuit of ambitious common goals and also pushes its employees to perform at their peak while also having fun.

Event management and ticketing website Eventbrite also gives regular feedback based on non-numerical metrics. Its quarterly performance reviews are based on behaviour as well as results — thereby underlining the importance of actions to accomplishments. This encourages similar behaviour for continuous success.

According to their former Head of HR Emily Couey, these reviews “help our employees feel connected to the mission of the organisation, and part of the team as a whole”. Its qualitative performance assessments are so successful in boosting workplace culture that 90% of employees at Eventbrite say it’s a great place to work, compared with 59% of employees at a typical US-based company.

A company’s performance evaluations should not solely rely on cold hard data, because the best employees do more than meet black-and-white targets. Instead, businesses should also measure qualitative performance. Ultimately, it is the employee achievements outside their job scopes — especially the intangible ones — that make the most impact and help high performers stand head and shoulders above all others in your organisation.

Discover the latest in our 2022 Talent Trends report, The Great X: This survey report covers what hiring professionals need to know to address talent attraction and retention for the year ahead. It also highlights a change of times in the hiring outlook as job candidates and employees now prioritise their well-being more than ever. Download our report to find out more.