Poor Performance Criteria Erode Employee Trust, Study Finds — And the Numbers Are Stark
Talent Management / Performance / Succession and Career Paths | 4 min read
New research from global HR research and advisory firm McLean & Company, published in its Guide to Establishing Performance Criteria, reveals how poorly designed performance criteria ripple far beyond the performance management framework — weakening employee trust, increasing stress, and undermining the employee experience in ways that directly affect retention and engagement. At a time when employees are paying closer attention to how their performance is measured and organisations face mounting pressure to get those decisions right, the research offers a structured, evidence-based framework for building criteria that are clearer, fairer, and better aligned with today's workplace realities.
"Performance criteria should aim to make success clearer, not more complicated. HR leaders need to define expectations that reflect both outcomes and behaviours, keep the number of criteria focused, and ensure employees can see how their work connects to broader organisational goals."
— Leann Schneider, Director, HR Research and Advisory Services, McLean & Company
What the Data Shows: The Cost of Getting Performance Criteria Wrong
The research draws on multiple waves of McLean & Company survey data to quantify the business impact of poor performance criteria — and the numbers are significant. According to McLean & Company's HR Trends Survey 2025, organisations that fail to provide a positive employee experience see voluntary turnover rates that are 40% higher. McLean & Company's HR Trends Survey 2026 finds that employees in such organisations are 1.27 times more likely to report elevated stress levels. Conversely, the research also quantifies the upside of getting it right: employees who understand their job expectations are 8.6 times more likely to be engaged in their work (Engagement Survey data, 2023–2025), and HR respondents who rate their department's performance management effectiveness as high are 4.7 times more likely to report an effective employee engagement strategy (HR Management and Governance Survey, 2023–2025).
The Most Common Mistakes
McLean & Company identifies three recurring failure modes in how organisations currently design performance criteria. First, overemphasing outcome-driven metrics — measuring only what employees accomplish without accounting for how they accomplish it, which distorts evaluation and misses the behavioural contributions that drive culture. Second, relying on generic criteria that do not reflect role context — applying the same performance framework across fundamentally different functions, seniority levels, and work models in a way that feels irrelevant and unfair to employees. Third, overloading evaluations with too many expectations — creating criteria frameworks so complex that neither managers nor employees can use them effectively, undermining both the credibility of the process and the ability of employees to understand what success actually looks like in their role.
McLean & Company's Framework for Better Performance Criteria
The Guide to Establishing Performance Criteria offers a structured three-stage approach for HR leaders seeking to rebuild their performance criteria on a more credible foundation. The first stage is to review organisational context — grounding criteria in the organisation's performance management philosophy, strategic objectives, employee segment needs, and operational realities, rather than applying generic templates. The second stage is to explore criteria options — assessing which combination of goals, role expectations, skills, competencies, values, and organisational citizenship behaviours best fits each employee segment. The third stage is to weight and communicate criteria — assigning importance based on what matters most across roles and functions, and ensuring employees can see the direct connection between their individual work and broader organisational goals. The research consistently emphasises that well-designed performance criteria evaluate both what employees accomplish and how they accomplish it — a dual-lens approach that creates a more consistent, credible, and fair foundation for performance management.
Key Takeaways
- • McLean & Company's Guide to Establishing Performance Criteria finds that poorly designed performance criteria damage employee trust, increase stress, and erode the employee experience — with measurable downstream impacts on retention, engagement, and organisational effectiveness.
- • Organisations failing to provide a positive employee experience see voluntary turnover 40% higher (HR Trends Survey 2025); their employees are 1.27× more likely to report elevated stress (HR Trends Survey 2026) — performance criteria design is not an abstract process question, it is a retention and wellbeing risk.
- • The upside of clarity is equally significant: employees who understand their job expectations are 8.6× more likely to be engaged (Engagement Survey data 2023–2025); HR leaders who rate performance management effectiveness as high are 4.7× more likely to report an effective employee engagement strategy (HR Management and Governance Survey 2023–2025).
- • Three common failure modes: overemphasing outcome-driven metrics (ignoring how work gets done); generic criteria that do not reflect role context; and overloading evaluations with too many expectations — all of which erode trust and make fair, consistent evaluation impossible.
- • McLean & Company's framework: review organisational context → explore criteria options (goals, role expectations, skills, competencies, values, citizenship behaviours) → weight and communicate criteria with clear line-of-sight to organisational goals. Criteria should evaluate both what employees accomplish and how they accomplish it.