Clear criteria cut turnover by 40% and boost engagement 8.6x
When performance criteria miss the mark, organisations don’t just end up with weak reviews – they compromise talent decisions and undermine their ability to achieve strategic goals.
Performance criteria are the standards and expectations used to evaluate an employee’s performance over the evaluation cycle.
They specify both the results employees need to deliver and the behaviours they must demonstrate.
The guide frames this as “the what” – measurable outcomes by the end of the performance cycle – and “the how” – the attitudes and behaviours that shape how employees approach their work.
When organisations focus only on outcomes, they neglect the steps employees take to get there.
That narrow view can lead people to hit targets while damaging key behaviours, relationships, and organisational values.
Effective criteria hold employees accountable for both what they accomplish and how they do it, creating a more holistic view of performance.
Misaligned performance criteria affect far more than the performance management (PM) framework.
The guide warns that poor alignment compromises decision-making across the talent management framework and leads to missed opportunities to use talent effectively and develop future leaders.
Over time, that weakens the organisation’s ability to meet its strategic goals.
The employee experience suffers as well.
Overemphasis on outcome-driven metrics encourages unhealthy competition and ignores behaviours and values.
Generic criteria that don’t reflect the organisation’s culture, priorities, or role context create a disconnect between what is measured and employees’ lived experience, which lowers morale and erodes trust.
Overloading evaluations with long lists of criteria makes reflections overwhelming and reduces the quality of development conversations.
The numbers underline the risk.
Voluntary turnover rates are 40 percent higher in organisations that do not provide a positive employee experience.
Employees are 1.27 times more likely to report higher levels of stress when their organisation fails to provide a great employee experience.
When organisations establish distinct performance criteria, they create a clear link between individual contributions and organisational objectives and support stronger performance and more data-driven talent decisions.
Well-defined criteria clarify expectations by giving employees a shared understanding of which behaviours and outcomes directly influence success.
They also increase engagement by highlighting how employee efforts contribute to organisational objectives and improve productivity by helping employees focus on what is most important.
The engagement impact is significant.
Employees who understand their job expectations are 8.6 times more likely to be engaged than those who do not (71 percent versus 8 percent).
HR teams that rate their performance management – including criteria – as highly effective are 4.7 times more likely to report an effective employee engagement strategy.
The guide positions performance criteria inside a broader PM philosophy and framework.
The PM philosophy describes the organisation’s performance management needs and how they align with culture, goals, and success metrics.
The framework then defines how performance will be evaluated and developed.
Criteria should be derived from that philosophy and consistently applied across the performance cycle.
Context is essential.
Organisations are encouraged to use the PM philosophy statement, employee segment needs, and factors such as culture, technology, manager capacity, and industry conditions to guide selection
Different employee segments may require tailored criteria to reflect their outcomes, nature of work, and success metrics, while still balancing simplicity and consistency.
The guide recommends selecting no more than three performance criteria per segment to keep evaluations manageable and employee efforts focused, while noting that the right number depends on role complexity and organisational nuances.
One of its key insights is clear: when in doubt, keep it simple.
Selecting too many criteria overwhelms and confuses employees and blurs priorities, while intentionally limiting them supports clarity, motivation, and high-quality performance outcomes.
