Performance management · HR

Are annual performance reviews necessary?

Meir Amarin Leadership style based on ability to motivate others

December 14th, 2015


We live in an interactive age where feedback provided constantly from various sources and channels. Performance review, in my opinion, is an ongoing process. Honest feedback and coaching should be provided by leaders as necessary during the year (not just once or twice a year). The review intervals can and should be more dynamic. What do you think?

Daniel-Flavius Lucica

December 14th, 2015

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.

Michelle Ed.D. Human Resource Director

December 14th, 2015

Good points.  If I think about life and work in the 21st century, we've come a long way socially and technologically.  What we have yet to do is define and refine what this means by way of management systems to align with an evolving social consciousness. Performance reviews, even by those that have professed to have abandoned them, still have mechanisms in place to rate and rank employee performance--management systems require these ratings for compensation targets. I don't see the need going away.  

I do believe we need to examine the function and purpose of performance reviews and, as you have pointed out, consider modifying our process and systems to align with a more modern view of feedback, inclusive of manager/employee feedback as well as employee/manager feedback.

Mona Sabet

December 14th, 2015

100% agree.  there are in fact a lot of new startups working on dynamic feedback alternatives to the outdated performance review.  some organizations are thinking about moving to no review at all (although I believe this to be yet another fad that will be written about in a few years as one of those poor organizational development decisions).  What I think is that no one yet has figured out how to make getting reviewed either fun or satisfying.  Absent that, even dynamic reviews will have adoption challenges.

Sujee Jeganathan President at CSI

December 14th, 2015

We evaluated using this app/tool called http://www.wirl.ca.  

It's a pretty interesting cloud based continuous feedback tool. At the time it may not have been a fit for my organization as a whole, but its definitely something we will re-evaluate in the future.

David Siegel

December 26th, 2015

Thanks for the pointer to Wirl - looks very interesting. 

I recommend reading "Joy, Inc.," by Richard Sheridan - one of the best business books I have ever read (and I've written a few). 

Mohan Goyal BIG Data Architect

December 28th, 2015

Annual performance reviews are outdated. Constant feedback, coaching, mentoring is the tool to inspire and motivate the team. Leaders have to develop mutual trust to win employees loyalty. Loyal employees put more than 100% and outshine. 

Timely constructive feedback works well as compare to YER performance review. YER performance review is merely an administrative tasks. Employees don't pay much attention to it.

Many companies has abolished this process.

Greg Pantelic

December 14th, 2015

Sujee Jeganathan Thanks for the WIRL shoutout!
Meir Amarin  Full disclosure, I'm Co-Founder of WIRL (wirl.ca) and we set out to solve this exact problem. Having met with thousands of business leaders, employees and managers, we've developed a strong understanding of the pains, processes and intricacies of employee feedback. You're correct that coaching and honest feedback (note, not just recognition) should be an ongoing process, as it engages employees at all career stages and solves a lot of the pains of traditional performance reviews.
@All, we're super passionate about the subject, have dove deep on PhD level research and have worked with top performance coaches to make feedback simple and effective for all employees while helping their orgs develop a culture of continuous improvement. If you're interested in learning more or checking out a demo of our solution, feel free to send me a message.

Sam Hermans Information Security | Risk Management | Founder at Lumturio.com

December 14th, 2015

I'm convinced finding good and motivated people will be one of the biggest pain points for the years to come.

The classic 'once a year related to salary talk'  talks are a thing of the past and while a technical solution might provide the right departments tooling, the required transformation goes way beyond.

Off the top of my head:

  • Providing employees with new training.
  • Putting the right transition teams in place
  • Identify who the appropriate internal change agents/ facilitators are
  • Review policies and procedures
  • Establish a system to reward progress against your change or transformation initiative
  • Provide specific feedback detailing each employee’s role in the effort and how it affects him/her


Doing one without the other may result in even more chaos.

Mona Sabet

December 14th, 2015

@Greg - I'm curious about your product.  checked out your website but it's always so hard to tell functionality from a website.  I am very interested in better feedback products - would love to understand what you guys offer.

Dan Kelley Managing Director

December 14th, 2015

I agree as well!  I'm interested to see how people are trying to solve the challenge with technology.  My personal challenge with annual reviews is that "the data" has decayed by the time I go to conduct a review, or be reviewed.. and the conversation tends to be very generic.  I'd love to have that feedback loop occurring all year long and have specific items to discuss during the annual meeting.