Organizations that clearly define performance expectations are significantly better positioned to support employee engagement, productivity, and fair evaluation processes, according to new research from HR consultancy McLean & Company.
The firm’s latest report highlights how transparency in performance criteria helps employees understand what success looks like in their roles. When expectations are clearly communicated, employees can align their day-to-day work with broader organizational goals, creating stronger engagement and reinforcing company culture.
Yet many organizations continue to struggle with defining performance criteria that reflect how modern work actually happens. Rapid changes in workplace dynamics, hybrid work models, and evolving job responsibilities have left many HR teams relying on outdated frameworks that fail to capture how employees truly contribute to business outcomes.
The research suggests that addressing this gap could play a crucial role in improving both employee experience and organizational effectiveness.
The Data Behind the Performance Management Challenge
Research from McLean & Company reveals a striking link between clarity and engagement. Employees who understand what is expected of them are 8.6 times more likely to be engaged in their work compared with those who lack clear direction.
The report also referenced a previous study, the HR Trends Survey 2025, which found that companies failing to provide positive employee experiences see voluntary turnover rates that are 40% higher than those that prioritize employee satisfaction.
The challenge is also affecting employee well-being. Data from the HR Trends Survey 2026 shows that employees working in organizations with weaker employee experiences were 1.27 times more likely to report higher stress levels, illustrating how unclear expectations can ripple into broader workforce challenges.
A key issue, according to the report, is that many companies continue to rely on performance criteria that are either overly complex or too generic to be meaningful. In some cases, criteria do not reflect how work is actually accomplished within teams, making performance evaluations feel disconnected from employees’ real contributions.
“Performance criteria should aim to make success clearer, not more complicated,”
said Leann Schneider, Director of HR Research and Advisory Services at McLean & Company.
She emphasized that HR leaders should define expectations that incorporate both measurable outcomes and workplace behaviors while ensuring employees understand how their work connects to wider organizational goals.
The report also found that HR teams reporting strong performance management capabilities were 4.7 times more likely to say they had an effective employee engagement strategy. In other words, organizations that get performance criteria right are often the same ones that build stronger employee relationships overall.
What HR Leaders Should Take Away
For HR leaders, the findings highlight the importance of rethinking how performance criteria are developed and implemented. Rather than relying on generic benchmarks, organizations should define expectations that reflect the specific realities of each role and team.
One key step is grounding performance criteria in operational context. This means evaluating employees based on real outcomes, skills, and responsibilities associated with their roles rather than relying on abstract or outdated metrics. Tailored assessments incorporating organizational goals and company values can help ensure that performance reviews feel relevant and fair.
Another recommendation is to keep criteria focused and manageable. When evaluation frameworks become too complex, employees may struggle to understand how their performance is measured. By narrowing criteria to the factors that matter most, organizations can make expectations clearer while improving the credibility of the evaluation process.
Communication also plays a central role. Managers need tools and guidance to explain updated performance criteria, address concerns, and gather employee feedback. Many HR leaders are using technology platforms that support continuous feedback, structured check-ins, and transparent review documentation. Without consistent communication and coaching, even well-designed frameworks can fail to deliver their intended impact.
According to Justine Czencz, Manager of HR Research and Advisory Services at McLean & Company, performance systems are most effective when embedded into ongoing conversations rather than treated as annual review exercises.
“When criteria are grounded in role realities and reinforced through communication, feedback, and coaching, organizations are better positioned to support employee growth and make performance management more effective,” she said.
Rethinking the Future of Performance Reviews
The broader conversation around performance management is evolving as organizations seek more effective ways to evaluate and support employees. Traditional rating systems and rigid evaluation frameworks are increasingly being questioned as companies look for methods that better reflect modern work environments.
One emerging approach involves shifting toward more narrative-driven feedback. Research from Cornell University suggests that employees often view narrative-only feedback as the fairest form of performance evaluation. Participants in the study also reported that narrative feedback provided clearer guidance on how they could improve their performance.
These insights reinforce a broader shift toward performance management systems that prioritize clarity, context, and communication. Rather than focusing solely on scoring employees, organizations are starting to emphasize developmental feedback that helps employees understand both their strengths and areas for improvement.
For HR leaders, the challenge moving forward will be balancing structure with flexibility. Performance criteria must be clearly defined, but they also need to adapt to changing roles, evolving business priorities, and new ways of working to reach employees.
