Part of what goes into being a good business leader is helping their employees grow, and one way of doing that is through open, honest communication. Employees should feel comfortable communicating with their superiors about their performance, as well as voicing questions or concerns they have.
To help foster open communication, many companies schedule routine meetings between managers and their employees that are dedicated to providing formal, two-way feedback. Although opportunities to provide formal feedback are great for tracking employee performance and ensuring that employees are aware of their manager's level of satisfaction with their performance, business leaders who encourage informal feedback can help their organizations thrive.
What is the difference between formal and informal feedback?
The primary differences between formal and informal feedback are the timing and structure of how feedback is given. Performance reviews, which are an example of formal feedback, are often used to address the employee's strengths and weaknesses, and to identify ways for the employee to improve performance moving forward.
Formal feedback can also be given in recurring one-on-one meetings between an employee and their direct manager.
"Other examples of formal feedback sessions that are invaluable are regular, scheduled one-on-one sessions, maybe weekly or every other week," Joey Klein, founder and CEO of Inner Matrix Systems, told business.com. "Those sessions are more valuable to get inside of where the employee is and what's going on for them."
Informal feedback, however, is spontaneous and less rigidly structured. It can occur at any time or location in real time. Informal feedback is more immediate, and it can instantly impact an employee's day-to-day performance because you aren't waiting for that scheduled meeting, which could be days or months away from happening, to give it. It is often a two-way form of communication.
"For the person leading the feedback conversation, they should always be aware of the timing, goal and delivery of both types of feedback," said Leah de Souza, talent management expert and coach at Trainmar Consulting.
Why is informal feedback important?
Employees want to perform well, and informal feedback helps them meet their performance goals.
"If we wait for a whole week to go by until our next formal scheduled check-in, that's a lot of time, a lot of work hours that pass without having an opportunity to adjust to hit our weekly marks, which leads to our monthly marks, which leads to our quarterly marks," said Klein.
Sometimes the best teaching moments can't be planned, and this is another reason why informal feedback is valuable. Informal feedback reinforces good behavior.
"If a leader is doing their job … observing … learning moments in their direct reports, informal feedback allows them to capture and ultimately capitalize on that moment, whenever it happens," said de Souza.
Informal feedback is also important for employee morale. Managers can provide instant praise and recognition when an employee does something right. This praise has a bigger impact when it is given in the moment, as opposed to several months later.
"Informal feedback is important because it is a demonstration of a trusting, positive relationship," said Megan Leasher, chief solutions strategist at Talent Plus Inc. "It conveys that something should be shared and that I care enough about you to share it right away."
Pros of informal feedback
There are several advantages to integrating informal feedback processes in your business, which can impact your bottom line.
Informal feedback gives employees the ability to instantly correct their mistakes. There is a good chance that an employee doesn't realize what they are doing wrong, and if you don't offer them immediate feedback about it, they won't be inclined to correct their behavior. This process allows employees to grow and hone their skills quicker than they would otherwise.
"By waiting until an annual or biannual meeting to discuss the event, the leader and employee have missed the opportunity to dissect and build on what happened," said Scott Whiteford, director of leadership development and analytics at Talent Plus. "In many cases, the event may have become larger or smaller based on the time and importance.
Informal feedback doesn't always have to be negative – it can be given when an employee does something exceptionally well.
"With informal feedback, if we give a bit of authentic encouragement that we're noticing the person is doing a good job, then they are encouraged to continue hitting the mark," said Klein.
Although it can be tempting to constantly praise your employees, managers and business leaders must be diligent about which behaviors they positively reinforce with informal feedback if they want it to be effective. Excessive positive feedback can lose its value and authenticity.
Once employees and managers are comfortable with giving and receiving informal feedback, it creates a company culture of open communication, where employees feel encouraged to speak to their managers about any problems they are experiencing without fear of retaliation. It also forces managers to think more critically about employee performance and communicate with employees about it more frequently.
Frequent informal feedback helps employees and leaders see eye to eye about the employee's performance.
"With informal feedback, the employee is more likely going to build trust with his or her leader, because they know what the leader is thinking based on the feedback," said Whiteford.
If a manager brings up something negative during a formal feedback meeting that the employee wasn't aware of, the employee might wonder why the manager never brought it up before. Informal feedback helps to avoid this situation by building rapport and trust.
Cons of informal feedback
Although informal feedback is a useful communication tool that every business should implement, there are a few potential limitations that can be associated with it.
Risk of overreaction
Since informal feedback occurs spontaneously, it leaves room for error. Managers must be diligent about how they give informal feedback and what they say. Informal feedback should not be given when you are emotional or lack all the facts of a story. If a manager provides negative feedback in the heat of the moment, it may come across too harsh and will not have the desired effects.
Lack of documentation
Informal feedback is often not documented, which can lead to challenges about employee performance improvement plans. If you are providing informal feedback about a new course of action for an employee, be sure to document it for future reference. This will be helpful to track employee progress and assess improvement at a formal feedback meeting.
Some managers may feel uncomfortable providing authentic feedback in an informal setting, especially if that feedback is negative. This can cause inconsistencies in how often a leader provides informal feedback. And since it's a spontaneous act that the leader directs, some leaders may provide more feedback to certain employees than others. Inconsistencies can cause informal feedback to be less effective.
Creation of redundancies
If managers are unsure about what specific behaviors they should address in an informal setting, it can cause them to share the same information in informal and formal feedback settings. Managers must strike a balance between what they discuss formally and informally with their direct reports.
Examples of informal feedback
Encourage your employees to provide specific, informal feedback. Here are some examples of what informal feedback looks like.
Reinforcing positive performance:
- "Great job on achieving XYZ! I know it was a tough project, and it turned out great."
- "I appreciate how innovative you were with streamlining XYZ! I think our team would benefit from learning what you did differently."
Correcting poor performance:
- "During the team exercise, what do you think went well? What can be improved?"
- "I noticed that you are making several sales calls each day, which is great, but you aren't closing many sales. Let's review your sales pitch to see where we can adjust it to better meet our clients' needs."
How to give informal feedback
Giving informal feedback varies depending on whom you are providing feedback to, but there is a general framework that every business leader can follow to make it effective. The first step is for the leader to adopt an informal feedback mentality; they must be prepared to give informal feedback and understand when it is and isn't appropriate to share that feedback.
De Souza listed a five-step process for giving informal feedback:
- The leader assesses if it is an informal coaching moment for a specific individual.
- The leader chooses the appropriate place and time. Depending on the environment and emotion at the time, immediate may not always be best. This is especially true in the case of constructive feedback.
- The leader may choose to ask the employee for two minutes of their time, so it is not viewed as a top-down activity.
- The leader lets the employee know what they specifically observed, what they think of it and asks the team member to share their thoughts. In the case of constructive feedback, the leader should ask the team member if they think anything went wrong and what can be done to fix it.
- Both parties either agree to continue with the current behavior (positive) or make a change with a deadline for the modified behavior (constructive). In the case of positive informal feedback, the moment can also be fun (e.g., high five, happy dance, sharing praise with the team).