Why Employee Listening Matters for Small Teams
5 Implications Making Managers Rethink Feedback Efforts
Small companies and their management teams are faced with many ongoing challenges, especially within the first few years of business.
With client satisfaction, lead generation, brand awareness, and financial planning top of mind, it’s no surprise that small business leaders might lose sight of employee needs, interests, and engagement. (Afterall, they’ve got a lot on their plate.)
But being small doesn’t mean businesses have to think small. Because even the little guys have a lot to offer their employees.
At the end of the day, all management teams are responsible for providing employees with clear expectations, guiding them with encouraging language, and providing authentic opportunities to support company growth. And no matter the size of the team, feedback plays a huge role in how employees see themselves within their organization.
According to Gallagher’s 2022/23 State of the Sector, 84% of employees agree that organizations value their feedback—with 65% believing that organization leaders learn from it—but only 47% say that employers have a robust process for capturing their insights and feedback (Gallagher, 2022/23). Because engaged employees improve business outcomes, feedback systems that affect employee performance and well-being serve as vital tools to align effort with expectation, opening crucial lines of communication between management and employee (Tate, Lartney, Randall, 2021).
So, what happens if leaders fail to provide feedback systems within small cross-functional teams? Well, the impact could feel twice its size: employees may begin to feel frustrated, undervalued, and worst of all, uninterested. If feedback systems in tight-knit, cross-functional teams lack attention, organization, intent, and empathy, business implications can be detrimental.
Still not convinced? Consider these 5 business implications that might bump employee listening to the top of your to-do list:
Reduced Performance Outcomes
Goal setting and feedback work together to create an environment of support, benefiting both individual and organizational goals (Tate, Lartney, Randall, 2021). When managers fail to offer positive feedback that reinforces positive behavior, constructive feedback that provides guidelines and asks reflective questions, and negative feedback that comes with opportunities for understanding and support (Qualtrics, 2013-2024), employees lose motivation to meet and exceed goals because they lack performance metrics that inform growth opportunities.
Distrust in Leadership
Pseudolistening or a lack of people listening style (PLS) can lead employees to believe that 1. Their feedback has no impact on decision making and 2. That management lacks concern for their feelings and emotions (Neill, Bowen, 2021). If employees sense that managers are not genuinely interested in listening, they might begin to withhold information, fostering a “climate of silence” with the beliefs that 1. It’s not worth the effort to speak up and 2. That voicing an opinion could be dangerous (Neill, Bowen, 2021, p. 6).
Decreased Employee Engagement
Management is responsible for providing employees with clear expectations, guiding them with encouraging language, and providing authentic opportunities to support company growth. If leaders fail to provide formalized feedback mechanisms within small cross-functional teams, employees may begin to feel frustrated and undervalued, causing them to deprioritize company goals, intentionally disengage, and potentially even leave the organization. While a climate of trust and performance goals and development are positively correlated to employee engagement, feedback and recognition is the “main determinant” of employee engagement in U.S. small businesses of 500 employees or less (Tate, Lartey, Randall, 16). According to Gallup, “disengaged employees can cost an organization approximately $3,400 for every $10,000 of salary (Qualtrics, 2013-2024). And for small enterprises, those numbers hit hard.
Prolonged Conflict-Issue Resolution
Employees are not just an organization’s asset, but rather “tactical and strategic change-makers who see inefficiency first-hand” with intentions of communicating observations to improve business outcomes (Workforce Institute, 2021). If valuable employee feedback is neglected or ignored, leaders could miss out on insights that inform company strategy or alter business outcomes. Plus, if employers go without addressing feedback, employees might begin to feel like their perspective doesn’t matter—and so they might stop sharing insights altogether.
Decreased Customer Satisfaction
Employees in small organizations impact brand identity and have close, direct relationships with consumers; their attitudes, behaviors, and communication can impact crucial client relationships. If organization leaders fail to determine goals to effectively change and shape company culture through regular feedback systems, they could risk a decline in company morale (Waltower, 2023). How employees perceive their value within an organization can directly impact their attitudes about their work and how they behave amongst teammates and customers. Turnover, whistleblowing, low morale, low productivity, and diminished loyalty, are all possible if employees display apathy because they feel their perspective doesn’t matter (Neill, Bowen, 2021)
Bottom line: Investing in the voice of the employee improves business outcomes because employee engagement is directly related to optimized financial performance—and the strategies that supports growth opportunities (Workforce Institute, 2021). According to the Workforce Institute, “88% of employees whose companies financially outperform others in their industry feel heard compared to just 62% of employees at financially underperforming companies.”
If employers neglect feedback loops, they risk a decline in employee engagement, effectiveness, satisfaction, and potential turnover. And for most, that’s a risk they can’t afford to take.
SOURCES
Arthur J. Gallagher & Co. "Gallagher State of the Sector, 2022/23." www.ajg.com/employeeexperience, 2023.
Tate, Tywanda D., Franklin M. Lartey, and Phillip M. Randall. "Do Performance Goals and Development, Feedback and Recognition, and a Climate of Trust Improve Employee Engagement in Small Businesses in the United States?" International Business Research, vol. 14, no. 6, 2021, doi:10.5539/ibr.v14n6p1.
Editorial Team. “Employee feedback examples with 10 strategies for giving and receiving feedback.” Delighted by Qualtrics, https://delighted.com/blog/employee-feedback.
Neill, Marlene S., and Shannon A. Bowen. "Employee Perceptions of Ethical Listening in U.S. Organizations." Public Relations Review, vol. 47, 2021, https://doi.org/10.1016/j.pubrev.2021.102123.
The Workforce Institute at UKG. The Heard and the Heard-Nots. Workforce Institute, 2021. www.workforceinstitute.org.
Waltower, Shayna. "Honest Employee Feedback Starts at the Top." Business News Daily, 24 Oct. 2023, https://www.businessnewsdaily.com/7010-employee-feedback.html.
Kitterman, Ted. “How Listening Programs Helped Nisan Boost Employee Survey Results.” Great Place To Work, Sept. 19, 2023, https://www.greatplacetowork.com/resources/case-studies/employee-listening-nissan-boost-survey.
D'Alessandro, Ruth. "Employee Listening Strategies & Examples That Work." Qualtrics Experience Management, 2024, https://www.qualtrics.com/experience-management/employee/employee-listening/.
Macey, William H., and Alexis A. Fink. Employee Surveys and Sensing: Challenges and Opportunities. Oxford University Press, 30 Mar. 2020, pp. 53-67.
Wada, Lauren. "How Often Should You Survey Employees?" Great Place To Work, 13 July 2022, https://www.greatplacetowork.com/resources/blog/how-often-should-you-survey-employees.
Ricard-Greenway, Suzanne. "Five Tips For Giving And Receiving Feedback For Performance Enhancement." Forbes Coaches Council, Forbes, 3 Aug. 2022, https://www.forbes.com/sites/forbescoachescouncil/2022/08/03/five-tips-for-giving-and-receiving-feedback-for-performance-enhancement/.