Are annual performance reviews still serving their purpose, or have they become an outdated ritual in today’s fast-moving workplace?

CREDIT: This is an edited version of an article that originally appeared in The HR Director

For decades, annual performance reviews have been a staple of workplace culture. Once a year, managers and employees sit down to discuss achievements, challenges, and goals for the future. In theory, these conversations are meant to provide honest feedback and create alignment between individual development and company objectives. In reality, however, the process often feels like a box-ticking exercise.

The issue is not just execution but design. Annual reviews were created for a workplace that moved slowly, where roles and business environments remained stable year to year. Measuring performance once every 12 months seemed reasonable when the pace of change was predictable. Today, however, business moves at a far faster speed, and waiting an entire year to provide structured feedback is no longer practical.

The Rise of Continuous Conversations

Instead of relying on a once-a-year evaluation, managers and employees benefit from weekly or bi-weekly one-on-one meetings. These shorter, ongoing conversations create space for quick adjustments, timely recognition and more authentic discussions about progress.

The role of the manager is also evolving. In the traditional model, the manager acted as a judge, assigning a score or rating. Today, the emphasis is increasingly on coaching rather than evaluation. Instead of saying, “Here’s how you performed,” the conversation becomes, “Here’s how we can help you grow.”

Quarterly goal setting plays a key part in this shift. Unlike annual objectives, quarterly goals can adapt to changing priorities, making them more realistic and motivating. The documentation that supports these conversations is also becoming lighter – short summaries rather than exhaustive records – so that the focus remains on dialogue rather than paperwork.

The Power of Peer Feedback

Another evolution is the growing recognition of peer-to-peer feedback. Some of the most valuable insights come from colleagues who collaborate closely every day. By incorporating peer perspectives, performance conversations become more balanced and inclusive. This also reduces the bottleneck of relying solely on the manager for feedback and helps flatten traditional hierarchies.

Performance discussions also become more meaningful when they connect directly to an employee’s long-term ambitions. Too often, reviews focus narrowly on past performance without considering future growth. Managers can change this by working with employees to map out the skills required for their career goals and linking feedback directly to these skills.

In short, annual reviews are not just disappearing – they are evolving into something more effective. The challenge for leaders is to create systems and cultures where performance conversations happen naturally, frequently, and with a shared purpose.