How to create a culture of feedback for the workplace

One of the biggest challenges for small business owners continues to be attracting and retaining employees skilled enough to help them grow their companies. While big corporations can offer raises and other financial incentives to retain valued employees, The Associated Press says, “Unfortunately, smaller businesses have the fewest resources available to pony up…so they have to find new ways to retain workers.”

Making the situation even more challenging, Gallup reports that as of early last year, employee engagement in the U.S. had slumped to a seven-year low. Gallup says, “the pattern continued into 2022,” with only 32% of employees saying they felt engaged at work, while 17% say they’re actively disengaged. According to Gallup, we’re now experiencing “the lowest ratio of engaged to actively disengaged employees” in 10 years.

Some of the biggest complaints from disengaged workers are that they don’t feel cared about, don’t think their opinions count, don’t have anyone who encourages their development and don’t have opportunities to learn and grow.

Simply put, employees want to work for a business that has a company culture where they feel valued and heard—a company with an established culture of feedback.

Feedback culture: What is it and how to create it

There’s a good chance you’re already incorporating some elements of a feedback culture into your business, like annual reviews, but that’s not enough anymore. Employees today want and deserve more. Building a culture of feedback takes intentional effort. Let’s look at how you can create a feedback culture at your small business. 

What is feedback culture?

In a workplace with a culture of feedback, employees are encouraged and empowered to offer their perspectives, viewpoints, and opinions without fear of punishment. This feedback is welcomed by everyone at all levels of the business, including the employees’ boss and the owner. 

It’s not enough to say, “Tell us what you think. We promise it won’t impact your future here.” Employees should feel safe knowing what they say is not only welcomed but free of retribution of any kind. 

Of course, you need to develop guidelines to make sure your culture of feedback is a healthy one. Creating a genuine culture of feedback could be more challenging than it sounds. While you may think employees would jump at the chance to criticize you and their coworkers, it’s not that simple. Some staff members may fear if they offer honest criticisms, they will be unfairly targeted by those they criticize. Others will feel compelled to contribute to the feedback culture but don’t feel safe offering negative input. So their feedback is always positive and laudatory, which isn’t helpful since it ignores reality and won’t create positive change.

Your guidelines should stress that while all criticisms are welcome, they need to be grounded in truth and expressed with the intent to further improve the work environment. 

Building a culture of feedback cannot be implemented in a day or even a month. To start, solicit input from the stakeholders about how it should be structured. And then, be flexible and prepared to pivot and make appropriate changes to ensure your employees feel safe contributing.

Remember, working in a culture of feedback is not just new for you but for your employees as well. Unfortunately, for most workers today, the only feedback they’ve received in their careers is the annual employee review, which on its own, is not very helpful.

Creating a culture of feedback is an active, not passive, activity. It’s not enough to collect feedback; you must act on it. Even when you don’t enact employee input, you should respond to it promptly.

Encouraging employees to be specific will help you implement their feedback. And if it’s not clear, ask for more information. For instance, employees complaining they never have enough time to complete their projects isn’t as helpful as telling you how much more time they need to complete it on time. Once you hear that, you need to pinpoint the problem. Are employees not getting their assignments on time? Do they need updated tech to complete the job more quickly? Specific feedback is always easier to act on.

Creating a culture of feedback

That’s the why. But how do you create a culture of feedback at your small business? Here are some tips for creating a culture of feedback

Are you prepared to “walk the walk?”

Before introducing this new management paradigm to your team, you need to ensure you’re ready to manage a culture of feedback. What kind of manager are you?

Ask yourself these questions:

• Do you offer clear directions, or do employees keep asking for clarification? 
• Do you have an open-door policy, or are employees afraid to interrupt you or bring problems to your attention?
• Do you accept responsibility when something goes wrong or blame others?
• Do you complain about some employees in front of others on your staff?
• Do you badmouth your clients and customers?
• Are you open to employees’ opinions and suggestions, or are you defensive when they speak up?
• Are you a micromanager?
• Do you ignore problems or react too slowly to company/employee issues?

Your answers will highlight potential trouble spots that must be rectified before a feedback culture can be developed. After all, you don’t want to assure your staff they can tell you anything and then react defensively or dismiss their concerns when they do.

If you don’t think you can handle a culture of feedback, you need to get training first. After you institute a culture of feedback, your employees will look to you for cues and model your behavior.

Develop a system

Think about how you want this new feedback culture to be structured. True cultures of feedback embrace continuous feedback. And only works if everyone in your company is on board with the process. When you institute a culture of feedback, it’s essential to make sure your outspoken employees don’t dominate the conversations. If your more introverted staffers feel “talked over,” they’ll stop participating altogether. 

Set your initial parameters. Will you require regular peer-to-peer feedback sessions? How will you participate? Will you require your managers to meet with their teams regularly? Gallup recommends having managers (in smaller companies, that’s you) hold “one meaningful conversation per week with each employee.” The 15-30 minute meeting should focus on “goals, customers, well-being and recognition” and “prevents employees from feeling disconnected.”

It's important to make sure feedback is balanced between negative and positive. Of course, it’s important to help struggling employees, but only telling someone what they’re doing wrong is not creating a culture of feedback. Instead, point out the positives of how they contribute to your business.

Set clear expectations

Gallup says the “most concerning decline [in employee engagement] has been in the lack of clear expectations for employees…Employees cannot perform at a high level when they are confused about what they should do.”

When you tell your staff you’re creating a culture of feedback, you must be very clear about what you mean, your expectations, and your goals. Part of explaining this new mindset is being transparent about what wasn’t working in the past and why a feedback culture will benefit them and the company. Admit to mistakes that were made and how things will be different from now on.

Provide training

Since most of us are not familiar with working in a feedback culture, it’s critical to provide mandatory feedback training to get everyone on the same page. 

Feedback training can take various forms, including:

• Workshops for the whole team
• Smaller group sessions 
• How-to videos or webinars 

Training should cover topics like:

• How to give feedback without sounding rude, harsh, or condescending 
• How to listen to feedback without getting defensive or making excuses
• Good listening skills
• How to ask questions 

Use different channels for feedback

Everyone has a different comfort level giving and receiving feedback, so it’s smart to offer choices, especially at the beginning. Some options include:

• Face-to-face, in-person, or online
• Written anonymous feedback
• Written attributed feedback
• One-on-one feedback
• Group feedback sessions

Peer-to-peer feedback is not only a vital part of building a culture of feedback but an excellent team-building exercise as well. The ideal situation is to get your entire team comfortable with the feedback process and continuously offer one another support, insight and advice. 

Practice makes perfect

The more your team practices giving and getting feedback, the easier it is to build a company culture around it. Feelings are less apt to get hurt, and the more employees know they’re being heard, the more productive and engaged they’ll be. 

So make feedback a “normal” part of your business practices.

Invest in growth

A feedback culture works best in companies with a growth mindset. That means you and your team are not satisfied with the status quo. 

When you hire, look for people who are adaptable and eager to learn. To feed that, invest in employee training, offer opportunities for continuing education, and send your employees to conferences where they can expand their skill sets.

Investing in them shows your team you value and trust them to help you build your business.

Nurture your culture of feedback

Building a culture of feedback takes hard work and nurturing. Your employees must feel free to share feedback with you and one another without worrying about being punished. 

Don’t be afraid to empower your employees—most have the company’s best interests at heart. 

The most essential part of creating a culture of feedback is to take action. If you don’t, your employees will lose faith and trust in you.

The benefits of employee feedback culture in the workplace

Working for a business with a culture of feedback benefits employees in various ways.

Employee development & productivity

Getting feedback helps employees further develop their skills and improve their performances. Feedback is how they learn what skills they need to focus on and what they do well. In addition, studies have shown that employees welcome feedback.

Increased motivation

Employees want to work harder at companies where they know they’re appreciated. Knowing there’s an opportunity to take on more responsibilities or get promoted is a powerful motivator. According to a survey from Workleap, 78% of employees say being recognized motivates them to do a better job.

Confidence boost

Feedback, positive and negative, is a confidence booster. Showing employees how to correct errors and reinforce their strengths lets them know they’re doing a good job. This boosts their confidence and makes them feel valued.

Cements work relationships

People who work in businesses that have developed a culture of feedback grow to like and respect their coworkers, helping create tighter work relationships and even outside-of-work friendships. Working with friends and people you like makes employees look forward to coming to work and increases the appreciation of their jobs.

Empowerment

A culture of feedback naturally leads to employees who feel empowered rather than powerless. They know they’re trusted and valued, and their input matters to their bosses. In addition, feeling empowered gives workers a sense of control over their work lives, making them less likely to quit.

Innovation

Employees who feel safe at their jobs are typically more willing to think creatively since they know they won’t be laughed at or fired for proposing ideas that may push the envelope. This is important. People afraid of losing their jobs aren’t willing to put themselves and their ideas out there.

How a feedback culture benefits your business

Employees are not the only ones who benefit from working in a culture of feedback. Businesses do as well. Here are some advantages you gain when you create a feedback culture at your company. 

Employee retention

Employees who feel valued and heard are more likely to stay at their jobs. Feedback increases employee satisfaction. It’s harder for small business owners to find qualified employees today, so retaining your valued workers and reducing turnover is more important than ever. 

Being able to retain workers saves your company a lot of money. The cost of replacing an employee who leaves is approximately one-third of their salary and a drain on company resources. 

A study from Workleap shows that companies that operate with a culture of feedback have 15% lower turnover rates.

Boosts employee morale

Teams with high morale are satisfied workers. And satisfied employees work harder, are more productive, and are invested in the success of your business. 

Become a better boss

Getting feedback from employees gives you insight into your management style and skills. You’ll learn what you’re doing right and wrong. You may think your weekly “pep” talks are motivating, but do your employees agree? Only in a culture of feedback will you learn the truth.

Avoid conflict

Operating in a feedback culture allows you to spot problems in your business before they erupt into something you can’t control. If your employees know they can trust you, problems between them can more easily be ironed out.

Employee engagement

Employee engagement soars when they feel people work at a business that asks for their input. Workers who feel valued don’t call in sick, come in late, or spread negativism to other employees. Engaged workers are more productive and confident. They’re also more loyal and less likely to quit for another job that may not treat them as well as you do—even if the salary is higher. 

McKinsey reports that up to 55% of employee engagement is driven by nonfinancial recognition. And that employees are more likely to quit their jobs if they don’t feel valued by their bosses.

Team collaboration

Employees who work collaboratively have higher morale and are more productive. Instead of pitting workers against one another, collaborative work helps your team learn new skills, build relationships, and think innovatively.

Nurture growth

Nurturing growth means investing in your employees, helping them learn new skills, and providing growth opportunities. Workers in these environments feel valued and are eager to come to work. Nurturing your staff increases employee retention.

Creates a positive work environment

A study from the University of Warwick shows that employees who say they work in a negative workplace are 10% less effective. A positive work environment leads to happier and more satisfied workers and lower turnover rates. 

Increase company value

MIT reports that more than 90% of North American CEOs believe that improving their corporate culture would also boost financial performance and most ranked a healthy company culture as top three among all factors in terms of its impact on results. 

How to measure feedback culture

It’s critical, of course, to know if your culture of feedback is effective and positively impacting the bottom line. So it’s essential to measure the effectiveness of your work culture. 

Kudos, an employee recognition platform, says there are three primary measurements of company culture. 

• Sentiment: tells you how employees feel about their role and organization. Typically collected through surveys or interviews, “sentiment data can help you confirm/disprove assumptions and get a pulse on the overall employee experience at a specific moment in time.” 
• Behavior: Behavioral data tells you how employees work and “can help you understand if your employees are living your company values.” 
• Relationship: Relationship data shows how your employees interact with their coworkers.

Here are four ways to measure the effectiveness of your company culture:

Surveys

Kudos says surveys are a great tool to get honest feedback from your workforce and help you understand overall employee sentiment. They can also alert you to any trends or issues within your workforce. But, “don’t rely on them as your only culture metric.” Kudos advises you to “layer survey data with behavior and relationship data. Surveys collect data about what people think or feel, but not about what they do, nor how they interact.”

There are numerous inexpensive survey tools, including: 

• Google Forms 
• SurveyMonkey 
• Jotform 
• Zoho Survey 
• Microsoft Forms 

Anecdotes

Keeping track of anecdotal feedback helps you uncover patterns or common themes. Kudos says a simple but effective way to collect this kind of information is to ask employees to complete this sentence: “I don’t know why [your company name] doesn’t just ____.” 

Workforce KPIs

Tracking your key performance indicators (KPIs), Kudos says, is “key to understanding important cultural shifts, both positive and negative. 

Workforce KPIs include turnover rate, absenteeism rates, internal promotions, and referrals.

Business KPIs

Measuring your business KPIs like customer retention rate, revenues, and sales can show how your new culture of feedback impacts your bottom line.

The bottom line

The bottom line is in a culture of feedback, employees feel valued and heard, making them more productive and engaged. And engaged employees are easier to retain, which is essential in today’s competitive labor market.

If your goal is to grow and scale your small business, you cannot do it alone. You need a productive and engaged workforce to help you. And one of the best ways to get that is by creating a culture of feedback in your business.