Article form Josh Bersin on Forbes.com

A new market has emerged: Employee feedback apps for the corporate marketplace. These tools are powerful and disruptive, and they have the potential to redefine how we manage our organizations.

In this article I discuss this explosive new market and talk about some of the innovative vendors helping make this market grow.

As the economy grows and the job market gets hotter, employee engagement and retention have become a top priority. As I discuss in Why Culture is the Hottest Topic in Business, most CEOs are bending over backwards to make their company a “great place to work.” Free food, unlimited vacation, yoga classes, and lavish educational benefits are becoming common… and in some cases, even wages are starting to rise.

As attention shifts toward the health and happiness of staff, employee engagement remains surprisingly low. Gallup tells us that only about 1/3 of employees are actively engaged, Glassdoor data shows an average engagement of a C+ (3.1 out of 5), and Quantum Workplace believes engagement is at its lowest level in eight years.

If we look at employee ratings of employers as a whole, we find that performance follows a bell curve. I’ve analyzed data from Glassdoor, a website which lets employees rate their employers, and you can see the distribution below. While some companies are doing very well, many are doing quite poorly — and the data shows no easy-to-spot patterns.  The highly engaged organizations are all shapes and sizes:  all industries, all sizes, and all ages.

Why is there such a wide variation in employee engagement and retention?

The answer is clear: building a highly engaged workforce is difficult.

As described in the Deloitte University Press article Simply Irresistible, there are 20 distinct factors that contribute to employee engagement, ranging from the quality of the jobs to the quality of management, career progression and opportunity, learning culture, and level of recognition. So these highly engaged companies are doing a lot of things right.

And the problem is getting harder. Today employees are more empowered, mobile, and demanding than ever.

New research by the MRI network shows that 90% of recruiters surveyed believe that “candidates are now in charge” – the highest this metric has been in five years. So if you aren’t thinking about how to keep your people happy, they might pick up and leave (or even worse, stay and undermine you).  Similar research shows that unhappy employees who stay can be a bigger problem than those who leave – they have an oversized negative impact on everyone else.

What can we do? How can a CEO, manager, or even HR team keep up with everything everyone needs?

The Solution: Employee Feedback as the Killer App

Our research shows that a new approach has arrived:  open, anonymous, employee feedback.

Just as customer feedback has transformed the customer experience, employee feedback is transforming the employee experience.

Consider what feedback and ratings have done for our lives as consumers. We can “like,” “rate,” or “evaluate” almost everything we buy – leading to a better shopping experience, better customer service, and products that more quickly adapt to our needs.

And we, as humans, thrive on feedback. Research now shows that when we don’t get feedback at work, we become nervous, suspicious, and generally less productive.  We worry about what other people will say and we feel uncertain about our future.  In fact, one study shows that when people are put in sensory deprivation conditions and get no feedback, they start to become psychotic!  This is what happens at work when we don’t know where we stand.

GE, which started the traditional performance management many companies are redesigning, now believes “Fast Feedback” is the key to its future. The company is piloting an app called PD@GE to let people post notes of encouragement, advice or criticism under categories like “insight,” “consider” and “continue.”

In the case of employees, the tools being unleashed are likely to change the way we run our businesses, totally redefining the way we think of “employee engagement.”

Redefining the Term “Feedback”

Let’s talk about the word Feedback.  At work the word often has a negative connotation. When a manager has a problem with someone, they often pull them aside and say “hey, let me give you a little feedback.” And most likely our heart starts to flutter and we immediately get worried and defensive.

In this new world we have to redefine this word and look at Feedback as a positive, constructive concept that can unleash innovation, solve problems, and create empowerment in the organization.

As one consultant put it to me, we should use the concept that “Feedback is a Gift.”

• Feedback is a gift to give (i.e., we should give it kindly and with respect) and
• Feedback is a gift to receive (we open it carefully, take it with respect, and thank the giver).

If we think about Feedback in this way, we can open the floodgates to constructive suggestions – and find a myriad of ways to run our operation better.

And most employees really want more. Research by Workboard (results shown below), a provider of feedback and employee management tools, found that highly engaged employees are getting more positive, constructive feedback by a mile.

At an organizational level, is it scary to let employees can give us their opinion whenever they want?  Of course it is – but that horse has left the barn. People now post information about their workplace on a variety of online sites (Glassdoor, Facebook FB +0.89%, and others) or share information privately with their friends.

This is the information from the first of nine pages. Read the other eight pages on Forbes.com (Source).