Summary
Performance feedback provides an essential lever for improvement at the individual, team, and organizational level. For decision-makers and leaders feedback provides an immediate way to access a range of different perspectives, highlight areas for improvement, identify strengths not previously considered, and monitor performance relative to goals or outcomes. A common challenge is that with input coming from various sources this feedback can be inconsistent—performance outputs can simultaneously be evaluated positively and negatively. Past research exploring responses to performance feedback shows that when it is inconsistent, there is a tendency for decision makers to re-code feedback as successful. Rather than address negative issues, decision-makers continue with current strategies. New findings, however, reveal that inconsistent feedback may yet carry unexpected benefits, prompting decision-makers to seek further clarification of the nature of the task environment, triggering deeper learning and enhanced performance.
Organizational learning—the process of improving actions through better knowledge and understanding—is widely acknowledged as the key to the success of any collaborative enterprise. In order for the organization and its people to learn fast, continuously improve, and remain innovative and efficient, a well-oiled performance feedback loop stands out as an essential support mechanism for effective organizational learning, and therefore a key challenge for leaders to get right.
Where performance feedback is positive decision-makers can confidently stay the course or stick with the status quo, whereas when it is negative they must act to change their current strategies. A problem occurs when feedback is inconsistent. Decision-makers can apply multiple interpretations of the feedback, leading them to miss important cues to make changes to improve performance.
A new study by Cassandra Chambers, Assistant Professor, and Pedro Aceves, Assistant Professor, at Johns Hopkins Carey Business School, and their colleague, Professor Marlon Alves at SKEMA Business School in Paris, explores the ways decision-makers interpret and respond to inconsistent performance feedback, revealing evidence that despite performance feedback being mixed, it can still provide opportunities for learning and help unlock previously untapped pathways for enhanced performance.
Getting to the source of the problem
The interpretation of feedback relates to perceptions of whether a performance output met aspirations vis á vis specific goals. Decision-makers consider achieving a satisfactory aspiration level to be a measure of successful performance, whereas falling below their aspiration level is seen to be suboptimal or even failure. Aspiration levels come from specific goals, such as a specific return on assets, percent of new products in a portfolio, or number of safety violations, etc., or from broader criteria such as profits, innovation, or ESG. The level of accomplishment against these goals is typically measured in comparison with performance in previous years, with other employees, or with competitors.
Decision-makers treat unambiguously positive performance feedback as a sign that all is well, and definitively negative feedback as a call for a change of strategy. This new study looked at whether inconsistent feedback might have any valuable impact on organizational learning and performance. Previous research has shown that confronted with inconsistent performance feedback decision makers are more likely to accept positive aspects of the feedback and to ignore the negative aspects—rather than vice versa. Also, that decision makers are most likely to learn when it is associated with changes in tasks and strategies.
New findings with implications to organizational learning
Based on evidence from over ten years of complete behavioral records in an online knowledge community (that featured a peer-to-peer reward system similar to that used by Microsoft), Chambers and colleagues found an additional, previously unrecorded dynamic at play. They found that in many cases when performance feedback was inconsistent, decision-makers were prompted to seek clarification about their approach to the task and the feedback that they received. This sensemaking process led to deeper learning and understanding and in turn dictated actions that led to improved performance.
Accentuating the positive is a feature of human nature, which in an organizational context can lead decision-makers to give undue attention to favorable assessments. As this tendency is often exhibited in response to inconsistent performance feedback—where positive signals are focused on and the negative ones ignored—it would imply that inconsistent performance feedback offers little benefit to learning and is unlikely to drive improvement. Chambers and colleagues’ study counters this view.
By observing the degree to which the decision-makers they studied changed their strategies after inconsistent performance feedback, and assessing whether the associated behaviors and outcomes were indicative of efforts to improve their understanding of what it takes to perform well, Chambers and colleagues provide compelling evidence that by encouraging decision-makers’ sensemaking efforts in seeking clarification, inconsistent feedback can be a valuable driver of learning and performance enhancement.
These new findings demonstrate that decision-makers and leaders may embrace ambiguity in an effort to learn and that despite the absence of changes in strategies inconsistent performance feedback can actually generate richer learning opportunities relative to consistent feedback. All of which shows that, rather than discarding inconsistent feedback, practitioners should value it and use it as a prompt for learning.
Access the full research paper here: Chambers, C. R., Alves, M., & Aceves, P. (2024). Learning from Inconsistent Performance Feedback. Organization Science. https://doi.org/10.1287/orsc.2022.16833
