Poor feedback carries hidden costs for organizations, affecting engagement, retention, and productivity. Learn strategies leaders can use to improve feedback.
UVU Business Impact Lab
April 2026
By Dr. Silvia Clark
Organizations invest heavily in hiring, training, and performance management, yet one of the most important drivers of performance, feedback, is often poorly executed. While most leaders recognize its importance, feedback frequently lacks clarity, timing, and usefulness. The result is not just missed opportunities, but hidden costs that affect productivity, engagement, learning, and retention. Understanding these costs is essential for building high-performing teams.
One of the most immediate consequences of poor feedback is unclear performance expectations.
When employees do not receive specific and timely guidance, they are forced to interpret
expectations on their own. This often leads to inconsistent performance and frustration.
Research shows that frequent, concrete feedback reduces ambiguity and improves alignment
with organizational priorities (Mertens et al., 2021). Supportive feedback environments
also enhance clarity and learning following development efforts (Ellison et al., 2022; Hezlett,
2016).
Poor feedback also reduces employee engagement. Feedback signals that a manager is paying attention and invested in an employee’s growth. When feedback is infrequent, vague, or overly critical, engagement and motivation decline. In contrast, timely and development-focused feedback increases commitment and discretionary effort (Mertens et al., 2021; Seibold & Gamble, 2015; Lau & Mackechnie, 2023). Without meaningful feedback, employees are more likely to feel disconnected from their work.
Another major cost is reduced learning and development. Feedback is a critical mechanism for on-the-job learning. When it is absent or ineffective, skill development slows, even when formal training programs exist. Research highlights that ongoing feedback, coaching, and observation are necessary for sustained learning and performance improvement (Scott et al., 2021).
Poor feedback can also increase employee turnover. Employees who lack clarity about their performance or feel surprised by evaluations are more likely to disengage and leave. Studies show that ineffective feedback environments are associated with higher turnover intentions, while continuous and meaningful feedback supports retention by clarifying expectations and development paths (Mertens et al., 2021; Milner et al., 2018; Scott et al., 2020). In many cases, turnover is driven less by pay and more by a lack of communication and support from managers.
Despite its importance, feedback often falls short for several reasons. Many managers
lack training in how to deliver feedback effectively, leading to avoidance of difficult
conversations, overly general comments, or feedback that focuses on problems without
clear guidance. Research shows that insufficient manager preparation is a key driver
of poor feedback quality, with many organizations still relying on informal or inconsistent
approaches (Mertens et al., 2021).
Feedback is also often too infrequent. Annual performance reviews remain common, but they are insufficient for guiding day-to-day performance. Studies suggest that structural constraints and a continued emphasis on evaluation-based systems limit the frequency and effectiveness of feedback, reducing its impact on development (Mertens et al., 2021).
Third, organizations sometimes emphasize evaluation over development. When feedback is tied primarily to ratings, compensation, or formal reviews, employees may perceive it as judgment rather than support, which can create defensiveness and reduce openness to improvement.
To reduce the hidden costs of poor feedback, leaders can take several practical steps.
Feedback is most effective when delivered close to the behavior it addresses and includes
clear, concrete examples, helping employees understand what to continue or change.
Shifting the purpose of feedback from judgment to growth encourages a more open and
constructive dialogue. Employees are more likely to engage when they see feedback
as a tool for improvement.
Rather than relying solely on formal reviews, organizations should encourage regular
check-ins and informal conversations. This normalizes feedback and reduces anxiety
around performance discussions.
Providing managers with tools and frameworks can improve feedback quality, including
how to balance positive and corrective input and align feedback with organizational
goals.
Feedback should not be one-way. Inviting employees to share their perspectives fosters
trust and makes conversations more meaningful and accurate.
Feedback is a fundamental component of effective performance management, yet its impact is often underestimated. Poor
feedback creates hidden costs across the organization, from reduced engagement to
increased turnover. Leaders who prioritize clear, timely, and development-focused feedback can unlock higher performance and create a more
engaged and capable workforce.
Ellison, L. J., Steelman, L. A., Young, S., & Riordan, B. G. (2022). Setting the stage: Feedback environment improves outcomes for a 360-degree-feedback leader-development program. Consulting Psychology Journal Practice and Research. https://doi.org/10.1037/cpb0000236 View Ellison, L. J., Steelman, L. A., Young, S., & Riordan, B. G.'s Setting the stage
Hezlett, S. A. (2016). Enhancing Experience-Driven Leadership Development. Advances in Developing Human Resources, 18(3), 369–389. https://doi.org/10.1177/1523422316645887 View Hezlett, S. A.'s Enhancing Experience-Driven Leadership Development
Lau, K. S., & Mackechnie, I. (2023). Reviewing Literature and Exploring Concept of Leadership for Learning to Organizational Values – HR Insights From Hospitality and Retail Industries in Hong Kong. International Journal of Professional Business Review, 8(6), e02565. https://doi.org/10.26668/businessreview/2023.v8i6.2565 View Lau, K. S., & Mackechnie, I.'s Reviewing Literature and Exploring Concept of Leadership for Learning to Organizational Values – HR Insights From Hospitality and Retail Industries in Hong Kong.
Mertens, S., Schollaert, E., & Anseel, F. (2021). How much feedback do employees need? A field study of absolute feedback frequency reports and performance. International Journal of Selection and Assessment, 29(3–4), 326–335. https://doi.org/10.1111/ijsa.12352 View Mertens, S., Schollaert, E., & Anseel, F.'s How much feedback do employees need?
Milner, J., McCarthy, G., & Milner, T. (2018). Training for the coaching leader: how organizations can support managers. The Journal of Management Development, 37(2), 188–200. https://doi.org/10.1108/jmd-04-2017-0135 View Milner, J., McCarthy, G., & Milner, T.'s Training for the coaching leader
Scott, K., Jarman, S., Moul, S., Murphy, C. M., Yap, K. R., Garner, B. R., & Becker, S. J. (2021). Implementation support for contingency management: preferences of opioid treatment program leaders and staff. Implementation Science Communications, 2(1). https://doi.org/10.1186/s43058-021-00149-2 View Scott, K., Jarman, S., Moul, S., Murphy, C. M., Yap, K. R., Garner, B. R., & Becker, S. J.'s Implementation support for contingency management: preferences of opioid treatment program leaders and staff.
Seibold, M., & Gamble, K. (2015). Capacity, commitment, and culture: The 3 Cs of staff development in a learning organization. Psychiatric Rehabilitation Journal, 38(3), 286–287. https://doi.org/10.1037/prj0000157 View Seibold, M., & Gamble, K.'s Capacity, commitment, and culture
