You are right. Annual performance reviews are obsolete and I don't think they were ever a good idea. Plus they only underly the root cause of their existence: lack of trust
, which in turn is caused by not hiring the right people
, which is turn is caused by hiring for the right position and not for the right person
Because of the underlying reasons presented above, neither parties are comfortable with it and it only emphasises on the obvious lack of trust. If the review is good employees would expect more money. If that doesn't happen they would feel disappointed. If it's bad employees would feel disappointed.
In summary the annual performance review is a very costly attrition generating tool.
Instead companies should focus more on creating the right culture, living and promoting the right culture, hire the right people that are compatible with their right culture and support their continuous growth. If all this was done right and documented accordingly, it will make for a much more meaningful and real-time performance and growth report.