Without adequate feedback, employees are lost in a vacuum, uncertain about what the organization wants them to accomplish and incapable of improving their own performance or helping the company drive towards its business objectives.

A recent survey by Psychological Associates corroborates earlier findings of a 15-year study conducted by the company suggesting that timely feedback from managers may be the linchpin that holds together an organization’s entire performance management system.

In the past, such "systems" actually consisted of a solitary event known as the dreaded "year-end review," an annual postmortem that produced anxiety on both sides of the table.

Employees wriggled in quiet frustration, ready to confront any unexpected criticism. Uneasy managers, on guard for behavior that might vary from submissive to hostile, found that suggestions intended to be helpful could also offend or demoralize the worker.

Now, in more enlightened organizations, the ideal performance management system is a year-round cycle that includes a performance evaluation, individual goal-setting, and periodic progress reviews. Informal, day-to-day feedback is also used to keep performance on track. The objective is to raise an employee’s level of performance before the next cycle begins, thus eliminating any unpleasant, year-end surprises. But results are often disappointing.

"Performance management systems are like simple electrical circuits," says Lefton. "When a breakdown occurs anywhere along the line, the whole circuit becomes inoperative." According to the study, more often than not, that circuit is disconnected by managers who offer little correction or guidance throughout the year.