Poorly designed performance metrics are emerging as a hidden driver of employee disengagement and turnover. New research from McLean & Company suggests that misaligned performance criteria can undermine not just evaluations, but the broader employee experience—prompting HR leaders to rethink how success is defined and measured.
McLean & Company’s latest industry guide, Guide to Establishing Performance Criteria, highlights a growing challenge in modern HR: organizations are struggling to align performance expectations with real-world work. The result is a disconnect that impacts employee trust, engagement, and ultimately retention.
The firm’s findings indicate that many organizations continue to rely on overly rigid or generic evaluation frameworks. These often emphasize outcomes at the expense of behaviors, fail to reflect role-specific realities, or include too many criteria for employees to meaningfully interpret.
This misalignment has measurable consequences. According to the firm’s HR Trends Survey 2025, organizations that fail to deliver a positive employee experience experience voluntary turnover rates that are 40% higher. Its 2026 data further shows employees in such environments are 1.27 times more likely to report elevated stress levels.
The Shift Toward Clarity and Relevance
At the core of McLean & Company’s guidance is a simple premise: performance criteria should clarify expectations, not complicate them.
“Performance criteria should aim to make success clearer, not more complicated,” said Leann Schneider, director of HR Research & Advisory Services at the firm.
This reflects a broader shift in HR technology and workforce strategy, where organizations are moving away from standardized performance reviews toward more contextual, role-specific evaluation models.
The research emphasizes that effective performance criteria must balance two dimensions:
- What employees achieve (outcomes)
- How they achieve it (behaviors and competencies)
This dual focus aligns with emerging HRTech platforms that integrate behavioral analytics and continuous feedback into performance management systems.
Engagement Gains From Better Criteria Design
The benefits of well-defined performance criteria extend beyond evaluation accuracy. McLean & Company’s data shows that employees who clearly understand their job expectations are 8.6 times more likely to be engaged in their work.
This finding reinforces a key principle in modern HR: clarity drives engagement.
Additionally, organizations that rate their performance management effectiveness highly are 4.7 times more likely to report having strong employee engagement strategies, based on the firm’s HR Management and Governance Survey (2023–2025).
These insights suggest that performance management is no longer an isolated HR function—it is a foundational component of the overall employee experience.
Persistent Challenges in Performance Management
Despite increased awareness, many organizations continue to struggle with performance criteria design. McLean & Company identifies three common pitfalls:
- Overreliance on outcome-driven metrics without considering behaviors
- Use of generic criteria that fail to reflect role-specific responsibilities
- Overly complex frameworks with too many evaluation dimensions
These issues can erode trust in the evaluation process, making it difficult for employees to perceive reviews as fair or actionable.
In enterprise environments, where platforms from Workday and SAP are used to manage performance data, misaligned criteria can also lead to poor data quality—limiting the effectiveness of analytics and decision-making.
A Structured Framework for HR Leaders
To address these challenges, McLean & Company outlines a structured framework for building more effective performance criteria.
The approach begins with grounding criteria in organizational context, including business strategy, workforce composition, and operational realities. This ensures that performance expectations are aligned with what actually drives success within the organization.
Next, HR teams are encouraged to evaluate different types of criteria—ranging from goals and competencies to values and organizational citizenship behaviors—to determine what best fits each role or employee segment.
Finally, the framework emphasizes the importance of weighting and communication. Assigning appropriate importance to different criteria helps prioritize what matters most, while clear communication ensures employees understand expectations and can act on them.
“Organizations are better positioned to support employee growth when criteria are grounded in role realities and reinforced through communication, feedback, and coaching,” said Justine Czencz, manager of HR Research & Advisory Services at McLean & Company.
The Role of Managers in Execution
While frameworks and technology play a critical role, the research highlights that managers remain the linchpin of effective performance management.
To support implementation, McLean & Company recommends investing in manager training programs focused on:
- Delivering effective feedback
- Coaching employees toward performance goals
- Navigating difficult performance conversations
These capabilities are essential for translating performance criteria into meaningful day-to-day interactions.
Industry Implications: Performance Management as Strategy
The findings come at a time when organizations are under increasing pressure to improve employee experience while maintaining productivity and accountability.
Performance management is evolving from an administrative process into a strategic capability, closely tied to engagement, retention, and organizational culture.
According to Gartner, organizations that modernize performance management practices are more likely to achieve higher employee engagement and better business outcomes.
At the same time, McKinsey & Company research suggests that companies prioritizing employee experience can outperform peers in productivity and retention, particularly in competitive talent markets.
What It Means for HR and Enterprise Leaders
For HR leaders, the message is clear: performance criteria must evolve alongside the changing nature of work.
This includes:
- Designing criteria that reflect real job responsibilities
- Balancing outcomes with behaviors
- Simplifying frameworks to improve clarity and usability
- Leveraging HRTech platforms to support continuous feedback
Ultimately, organizations that get performance management right can create a more engaged workforce, reduce turnover, and build a stronger foundation for long-term success.
Market Landscape
The global market for performance management software and HR technology continues to grow as organizations seek more effective ways to manage talent. IDC projects sustained investment in employee experience platforms, with performance management emerging as a key area of innovation.
At the same time, the shift toward skills-based organizations and continuous performance evaluation is reshaping how companies define and measure success.
McLean & Company’s research reflects this transition, highlighting the need for frameworks that are both data-driven and human-centric.
Top Insights
- Misaligned performance criteria can increase voluntary turnover by 40%, highlighting the critical role of clear, relevant evaluation frameworks in improving employee experience and retention.
- Employees who understand job expectations are 8.6 times more likely to be engaged, reinforcing the importance of clarity and communication in performance management strategies.
- Organizations are shifting toward balanced evaluation models that measure both outcomes and behaviors, aligning performance management with modern workforce expectations and HRTech capabilities.
- Common pitfalls include overly complex criteria and generic metrics, which can erode trust and reduce the effectiveness of performance evaluations across enterprise environments.
- McLean & Company’s framework emphasizes contextual alignment, prioritization, and communication, helping HR leaders build more credible and actionable performance management systems.
