How to establish a thriving feedback culture in your company

The term “feedback culture” has been part of companies' everyday language for years. “Not scolding is praising enough” is an outdated corporate concept — and in an era marked by an increasing shortage of skilled and agile employees, employers understand that an essential aspect of employee satisfaction and retention is feedback. However, systems such as a “suggestion box” or sayings such as “my doors are always open” are not enough. So, what makes a sound, constructive, and open feedback culture? What are the obstacles? And, how can you establish a thriving feedback culture? Find out here.

What does feedback culture mean?

Let's start by saying, feedback culture is a culture or part of the corporate culture. Was it necessary to state this? We think so, as not all the companies that ask for feedback at one point in time have an established feedback culture. What do we mean by that? A corporate culture is based on shared ways of thinking, norms, and values within a company (Berner, 2021). Therefore, the feedback culture is more profound than individual measures.

And, in the feedback culture, reciprocal, cross-hierarchical, and regular feedback on one's behavior and external perception are part of the companies' values and norms. Therefore, we perceive them as natural and desirable.

For the feedback culture to develop in the first place, the following values should also be part of the corporate culture:

  • Mutual trust
  • Openness
  • Good communication

You see: even if you conduct surveys on a regular basis, you haven’t yet established a feedback culture.

Why do you need a feedback culture?

Agility is an essential aspect of many companies. However, quick changes reduce the ability to plan and keep track of learning curves and needed changes. Even if you have a good overview of your company’s agility, it isn’t always possible to quickly and satisfyingly solve existing problems for employees. On the other hand, an established feedback culture enables employees and teams to approach problems while taking responsibility, directly implementing measures, and further develop throughout the process.

In the era where independent work, teams, and work projects are increasingly in the foreground, the lack of feedback culture quickly leads to uncertainty and dissatisfaction among employees. Where is my professional future headed? Are my daily efforts recognized? Am I still part of it?

In the currently raging “War for Talents” (Bushold, 2019), the uncertainties may quickly lead to high turnover rates. We see this as the power is reversed — competent employees are spoiled with extensive offers from prospective employers who are actively trying to recruit these young employees in an attempt to counteract the acute shortage of skilled workers.

Therefore, the benefits of a healthy feedback culture are numerous (Kraus & Partner GmbH):

  • When detected at an early stage, you can eliminate errors and risks, and uncover potential opportunities
  • Changes and developments are smoother
  • Regular feedback facilitates individual and joint learning successes
  • Trust and a sense of community within the company are strengthened
  • Self-esteem and employees’ initiatives increase
  • Employee satisfaction increases, and loyalty towards the company is strengthened

To put this into numbers: studies show that regular feedback increases employees’ motivation and performance by 10%! This percentage rises to 17% when it is communicated that positive results are seen and appreciated! (Conniff, 2005). Once again, we state: appreciation is an essential important aspect of a thriving feedback culture!

Yet, a 2019 survey by CompensationPartner GmbH from 2019 shows that 45% of the respondents feel they receive too little appreciation from managers**. So, does your company offer sufficient praise for achieved goals and good performance?

Key concepts & models

At Pulse, we believe that defining feedback as “information that lies between the actual and target state” (Semmer & Pfäfflin, 1979) does not do justice to the complex challenges of successful feedback within an established feedback culture.

So let us take this one step further. To understand how to implement and maintain a feedback culture in your organisation, it is useful to know the underlying psychological concepts and how feedback works. Here are some helpful models from work and social psychology:

Feedback’s function according to Jöns and Werther (2005)

Adapted from Jöns (2005).

In terms of feedback’s functions, we distinguish the three targeted groups that benefit from feedback in different ways (Jöns, 2005; Werther, 2020):

  • Feedback givers
  • Feedback receivers
  • The groups involved in the feedback process which consist at least of the two first-mentioned target groups

External and self-perceptions as well as blind spots

Various psychological self-theories also illustrate the added value of an established feedback culture for feedback recipients and participating groups. Among other things, the importance of alignment between self-perception and external perception is emphasised here. For example, the better our self-perception matches the perception from others, the better our self-esteem (Werther, 2020).

We think the Johari Window is a beneficial model for picturing the benefits of a healthy feedback culture through the alignment of self-perception and others’ perceptions (cf. Werther, 2020). Developed by American social psychologists Joseph Luft and Harry Ingham, the model consists of four parts (Luft & Ingham, 1995; ibid.):

Adapted from: https://www.communicationtheory.org/the-johari-window-model/.

Here you can find a detailed explanation and definition of the Johari window.

Typical obstacles & simple solutions

Over the years, we’ve found that many organisations struggle with the same challenges when establishing a feedback culture. Here are the two most important ones and what you can do about them:

Too infrequent feedback

According to a study by Questback GmbH (2015), 48% of the companies surveyed only conduct feedback rounds and employee surveys on an annual basis. In 42% of the companies, it only happens every two years!

That’s definitely too infrequent – not only do we think so, but so do 50% of the employees who were asked about this topic in a study by Amadeus FiRe AG (Galais, 2015). So, let’s be clear, where is the problem?

Especially in today's world, where corporate structures, business models, and areas of responsibility are in a state of permanent change, many things can go in undesirable directions within two years. It starts with employee satisfaction and stops with project processes. Or – which is sometimes even worse in today's competitive mentality – nothing develops at all.

But isn't every two years better than never? You can look at it either way. Above we already described how vital the comparison of self-perception and perception by others is for the self-esteem and further development of employees. If feedback rounds only happen every two years in your company, it's likely that the gap between the two perceptions is gigantic. So in this case infrequent feedbacks even decrease self-esteem – and the feedback culture is characterised by pressure inhibition instead of openness and trust.

On the other hand, quarterly or semi-annual feedback rounds create an environment in which the gap between self-perception and perception by others can be efficiently narrowed through frequent comparisons. Constructive feedback is seen as a natural and desirable part of the corporate culture. Furthermore, the organisational effort with digital feedback tools (like Pulse) is minimal!

Lack of participation

Of course, we don’t need to reinvent the wheel in this article. Many companies understand that a feedback culture is essential, and 60-80% of larger companies have been using feedback tools for years (Werther et al., 2018). However, as stated earlier, using tools doesn’t mean that a healthy feedback culture will arise. If your company has the same problem, you can ask yourselves the following questions:

Is it due to lack of implementation?
Establishing a feedback culture is usually not an end in itself, but has clear goals such as increasing employee satisfaction and company performance. And yet, many companies struggle to actually implement the feedback given and received to move closer to the goals established. What does it look like in your company? Is the feedback goal-oriented or is it an exchange for its own sake? Even with top-down measures, you'll eventually hit a wall in establishing a feedback culture. Can all employees in your company actively participate and thus turn feedback into concrete improvements?

And for areas where only management can implement feedback: Is the process communicated transparently? If not, we recommend strengthening communication and creating an environment where individual feedback is communicated, but where they also share the consequences of the feedback.

And, it pays off! The comprehensive study “The Employee Experience Advantage” (Morgan, 2017) reveals that employees are up to 100% more motivated and engaged when they see the company actively responding to feedback.

We think this makes perfect sense: would you feel like trying to get constructive feedback if you felt it was not going to be implemented anyway? And if the management receiving the feedback isn’t making any effort to act on it and the potential for improvement - why should you take your own feedback seriously?

Is there a culture of trust?
Trust is the foundation of a healthy feedback culture where employees and managers give and receive feedback equally, respectfully, and without fear. If you feel that mutual trust is lacking in your organisation, the following actions might help:

  • Encourage leaders to be reflective and open about their mistakes. First, this is not a sign of weakness, but rather a sign of strength. Secondly, it shows employees that nobody is perfect! Mistakes happen, and in a stable feedback culture they can be communicated without anything bad happening.
  • Show appreciation - whether from employees or employers. Generally, feedback tools and discussions are only used when problems arise.
  • Demonstrate trust, don’t just talk about it. A control-oriented corporate culture is outdated. Enable your employees to take responsibility.
  • Communicate transparently about the culture processes. Are the ways in which feedback is used and how decisions based on feedback are made clear to employees?

Is there a lack of openness?
You may notice that we often emphasise the need for openness, communication, and cross-hierarchical information. This is done so that all stakeholders or the three target groups defined by Jöns (2005) can benefit from feedback and co-create change.

And maybe you are asking yourself now: isn't anonymity the essence and goal of a feedback culture where honest feedback is given without fear? At Pulse, we have a clear opinion on this: Openness (almost always) wins! We've found that anonymity can lead to a witch hunt culture instead of creating a trusting, open feedback culture. And yes, blowing off steam can also become a problem, because that kind of feedback is rarely constructive. And finally, in many cases, anonymity makes it difficult to implement feedback in a meaningful and targeted way, as bottom-up implementation is nearly impossible.

That's why we rely on partial anonymity in our online employee survey tool. We show what needs to be visible so that everyone in the company can work meaningfully with the results.

Is there a lack of qualitative feedback?
A few years ago, Microsoft had problems with lack of participation with feedback – despite an existing online feedback platform (Hofner, 2020). To solve the problem, Microsoft increased their focus on qualitative feedback. They rebuilt their feedback tool to focus comments on articulated ideas rather than relying solely on quantitative rating scales and their equivalents. At Pulse, we can only support this, as our tool also focuses on freely expressed qualitative feedback, which leads to intensive engagement with feedback at all levels for our customers. Best of all: we have been able to measurably increase the feedback culture.

Conclusion

To retain employees and quickly implement necessary changes in times of agility, companies need a trusting and open feedback culture. This means a corporate culture in which mutual, cross-hierarchial and regular feedback are part of the company’s values.

In this article, we’ve outlined the underlying social and occupation psychological concepts for feedback culture and have shown which challenges may arise, and how to overcome them.

At Pulse, we try to incorporate our experience and insights into the success and disruptive factors of a successful feedback culture into our digital survey tool. Individual ratings, while always anonymous, are visible to all in the form of team, department or company scores. Employees see feedback from managers and vice versa. Within a team, members even see each other's comments by name.

Feedback giving, receiving, and participating groups all communicate with each other on one level. Everyone gets a holistic overview of the current state and underlying structures of the company and can actively participate in the implementation of improvements.

Interested in our online employee survey? Learn more here!

Sources

Berner, W. (2012). Culture Change. Unternehmenskultur als Wettbewerbsvorteil. Schäfer-Poeschel Verlag, Stuttgart.

Busold, M. (2019). War for Talents – Erfolgsfaktoren im Kampf um die Besten.

Conniff, R. (2005). The Ape in the Corner Office: Understanding the Workplace Beast in All of Us, Crown Business.

CompensationPartner GmbH (2019). Umfrage: Gründe für die Kündigung. Retrieved from: https://www.compensation-partner.de/downloads/infografik_kuendigung_print.pdf

Galais, N. (2015). Feedbackkultur im Unternehmen und Zufriedenheit von Mitarbeitern. Studie von Amadeus Fire Personaldienstleistungen in Kooperation mit der Friedrich-Alexander-Universität Erlangen-Nürnberg.

Hofner, T. (2020). Wie Microsoft seine Feedback-Kultur verbesserte. Retrieved from: https://abilitools.com/2020/11/02/feedback-kultur/

Jöns, I. (2005). Feedbackinstrumente im Unternehmen : Grundlagen, Gestaltungshinweise, Erfahrungsberichte, Köln.
Kraus & Partner GmbH. Feedback-Kultur. Retrieved from: https://www.kraus-und-partner.de/wissen-und-co/wiki/feedback-kultur-entwickeln-berater-beratung

Luft, J. & Ingham, H. (1955). The Johari window, a graphic model of interpersonal awareness. In: Proceedings of the western training laboratory in group development, Los Angeles: UCLA.

Morgan, J. (2017). The Employee Experience Advantage, Wiley.

Nadia (2018). Feedback geben – aber richtig: So etablierst du eine starke Feedbackkultur. Retrieved from: https://engage.kununu.com/de/blog/starke-feedbackkultur/

Questback GmbH (2015). Employer Surveys – Current Facts, Trends, and Analyses (2015)

Semmer, N. & Pfäfflin, M. (1979). Interaktionstraining. Ein handlungstheoretischer Ansatz zum Training sozialer Fertigkeiten, Beltz.

Werther, S. (2020). Feedback in Zeiten der Agilität, Haufe.

Werther, S. et al. (2018). Die Zukunft von Feedback in Unternehmen. In: Jöns, I. & Bungard, W. (Hrsg.), Feedbackinstrumente im Unternehmen : Grundlagen, Gestaltungshinweise, Erfahrungsberichte.