Feedback and trust are the foundation of high-performing medical teams. Traditional performance management systems often fail, however, because they rely on infrequent, hurried evaluations and rigid and poorly defined rating criteria, according to C. Allen Gorman, PhD, an industrial-organizational psychologist at the University of Alabama at Birmingham Collat School of Business.
Traditional performance management systems lack employee input and buy-in. These systems can feel punitive rather than developmental, leading to employee disengagement and feedback resistance, Dr Gorman said. To fix performance management systems, healthcare organizations should prioritize transparent and honest communication and adopt a more dynamic, continuous 2-way feedback model that emphasizes frequent check-ins, coaching, and goal-setting, he said.
Avoid a ‘One-Size-Fits-All’ Approach
“Don’t use a one-size-fits-all approach,” he added. “Customize development plans to individual strengths, weaknesses, and career goals. Don’t ignore well-being and work-life balance. Burnout in healthcare is rampant. Physicians should ensure workloads are manageable and offer flexibility where possible.”
When employees feel valued and empowered, they exhibit greater engagement, stronger relationships, and improved performance, Dr Gorman said.
“Recognize and appreciate staff contributions,” he said. “Simple gestures like verbal recognition or handwritten notes can boost morale and retention. Link performance criteria to patient care. The performance reviews should align with quality of patient interactions, teamwork, and operational efficiency, rather than arbitrary benchmarks.”
He added: “The healthcare support workforce, including nurses, medical assistants and administrators, appears to be shrinking due to burnout and job dissatisfaction. Private practices must work harder to attract and retain talent. Performance management is an important tool for workforce engagement and retention.”
Emphasize Role of Leaders
Acknowledging leadership in the workplace is commonly overlooked. It is important to emphasize the role of leaders at all levels in keeping employees engaged and motivated, Dr Gorman said. This allows for transforming performance management into a growth-focused tool. “Make feedback constructive and timely and address concerns as they arise, rather than waiting for formal review periods. This builds trust and helps staff make adjustments early.”Replacing infrequent or year-end evaluations to a system of continuous feedback and development, encourages regular coaching conversations and adaptable goals, he said.
“Prioritize frequent check-ins. Instead of annual reviews, schedule monthly or quarterly coaching sessions to discuss strengths, areas for improvement, and career development,” Dr Gorman said.
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“Make feedback constructive and timely and address concerns as they arise, rather than waiting for formal review periods. This builds trust and helps staff make adjustments early.”
Common Pitfalls
Physicians are being encouraged not to make performance management just an exercise in compliance. If feedback is only given because it’s “required,” employees may not take it seriously. “These shortcomings create a disconnect between performance evaluation and actual performance improvement, ultimately failing to enhance employee engagement, motivation, or productivity,” Dr Gorman said. “Patients are now expecting personalized and efficient care. A disengaged workforce leads to lower patient satisfaction and poorer health outcomes. Ensuring engaged and well-supported employees through well-designed performance management translates directly to better patient care and retention.”
Crystal Fullilove, of Staffing Industry Analysts (SIA), a global research and advisory firm on staffing and workforce solutions with headquarters in Mountain View, California, said demand for healthcare professionals remains quite high compared with the supply of workers. “The unemployment rate for healthcare practitioners, which includes physicians, nurses, and other allied healthcare professionals, remains below 2%. This is less than half the unemployment rate for the overall US workforce,” Fullilove said.
SIA’s Vice President of Research Timothy Landhuis said the physician workforce shortage requires a multifaceted approach with both short- and long-term strategies. This begins with efforts in Congress, practice managers, and healthcare staffing firms. “Implementing payment reforms that provide annual payments to physicians to account for increasing practice costs can reduce practice closures, ensuring continued access to care,” Landhuis said. “Leveraging technology, including telehealth and artificial intelligence (AI), can alleviate administrative pressures, freeing up physicians to work at the top of their license, while also reducing burnout.”
Even before the COVID-19 pandemic, the US healthcare labor market faced challenges with the demand for professionals in healthcare occupations outpacing supply. Mercer, a global investment company, this past August released a report titled The Future of the U.S. Healthcare Industry: Labor Market Projections by 2028 that projects a nationwide healthcare worker shortage of 100,000 by 2028. The report highlights how factors such as accelerated resignations, burnout among healthcare workers, an aging population and wages that lag the broader labor market, are contributing to the decline in labor supply in certain states.
Strong Workforce Strategy Needed
The analysis emphasized the importance of having a strong workforce strategy to compete both with other healthcare organizations and with employers in other industries. To combat labor shortages, the report suggests employers develop comprehensive strategic plans and innovative tactics for attracting and retaining talent. This approach also needs to include good compensation and benefits packages. Clinicians are encouraged to find creative ways of sourcing talent, redesigning work, and optimizing work schedules.
The report notes that it is crucial for healthcare systems and governments to work together to address specific labor gaps across locations and occupations, including subspecialties within healthcare labor. Nursing assistants have the biggest projected deficit over any other analyzed healthcare occupation, signaling the need to improve talent attraction and retention strategies for this segment.
On a positive note, the labor supply of home health and personal care aides is projected to exceed demand nationally by almost 48,000 workers by 2028, with an average annual growth rate of 3.4%, according to the report. Healthcare employers, however, will be competing with many other industries for these lower-wage workers.
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