Performance reviews damaging employee mental health
New U.S. data links poor review practices to anxiety, low motivation and lost talent.
Performance reviews are not just falling short, they may be doing real harm.
A new survey of employees found that one in four question their value to their employer after a review.
Many report feeling anxious, uninspired, or less productive, suggesting that current review practices are damaging both wellbeing and performance.
- One-third described their most recent review as a box-ticking exercise
- 60% said their performance metrics were unfair
- Only 29% trust their organisation’s evaluation process
- 80% of leaders say employees must quit to advance
There is a clear disconnect between leadership and workforce experience. Two-thirds of senior leaders expressed confidence in their frameworks, yet just 19% of employees agreed. Most leaders also admitted that employees often need to leave the company to earn a promotion or pay rise, highlighting performance management as a barrier to progression rather than a support.
“Without integrated systems, even the best-designed programs collapse under manual workarounds and misaligned data. Most organizations are flying blind because they’re missing a capability layer,” said Blake Proberts, CEO and Founder of Acorn, which commissioned the research. “A capability layer gives you a single source of truth for what good looks like in every role, so you can offer data-informed development.”
“Most organizations still have no reliable way to evaluate performance based on what people are actually capable of,” added Keith Metcalfe, President of Acorn. “The industry has spent decades and millions of dollars trying to fix the wrong problem. We don’t need another HR process, we need real capability systems that objectively and consistently map what people can do, what they need to learn and how that moves the business forward.”
Support is growing for capability-based performance management, an approach that assesses people on what they can do and how they can grow, rather than rigid annual metrics. AI-powered tools that integrate learning, job roles and business needs are emerging as a credible path forward.
Acorn has launched Capabilities AI, a tool that maps capability frameworks to job descriptions and builds personalised development plans. And the company has announced it has secured a $12 million investment to support product development, geographic expansion and new partnerships.
Research
Research conducted by Censuswide for Acorn with 602 customer experience leaders and practitioners across the United States, United Kingdom, Australia, and New Zealand between February 13-21, 2025.
Links
The full research study from Acorn is available to download: “The 2025 Corporate Performance and Learning Survey: Current Practices and Employee Sentiment.