Why Annual Performance Reviews No Longer Meet Employee Expectations

The Case for Continuous Feedback

For years, the annual performance review has been a staple of workplace culture. It was the formal checkpoint where employees and managers sat down, reflected on the past year, and decided ratings, raises, and promotions.

But let’s be honest: the world of work has moved on.

Employees today want real-time conversations, not once-a-year reports. Business cycles move too quickly to rely on outdated goals set 12 months ago. And most importantly, the annual review often does more harm than good.

In fact, research from Gallup and Deloitte shows that a majority of employees find annual reviews unhelpful and demotivating. Many managers dread them too.

So why are annual reviews falling short? And what’s the alternative?

The Problem with Annual Reviews

1. Feedback comes too lateImagine you’ve been working on a project since January, but your manager doesn’t give you structured feedback until November. By then, the moment has passed. Opportunities for improvement are gone, and recognition feels delayed.

2. They create anxiety, not growthWhen feedback is bundled into one “judgment day,” employees often feel nervous and defensive. Instead of a conversation, it becomes a negotiation.

3. They miss the pace of businessMarkets change, priorities shift, and new challenges arise all the time. Goals set once a year can quickly become irrelevant. Employees need feedback that adapts as fast as the work itself.

4. They focus on evaluation, not developmentAnnual reviews are often linked to pay and promotions, which means they lean heavily on evaluation. That leaves little room for genuine coaching, learning, and career development.

The Case for Continuous Feedback

So, what’s the alternative? A shift toward continuous feedback — regular, ongoing conversations between employees and managers.

Here’s why it works:

• Real-time learningFeedback lands best when it’s fresh. Continuous feedback allows employees to reflect, adjust, and improve in the moment — not months later.

• Encourages a growth mindsetWhen feedback is ongoing, it becomes normal. Employees see it as a tool for growth rather than criticism. This builds resilience and adaptability.

• Drives engagement and trustFrequent check-ins signal that managers are invested in their people. Employees feel seen, valued, and supported — which strengthens connection to the organization.

• Supports retention and career growthIn today’s competitive market, employees want to know they’re developing. Regular feedback conversations support career aspirations, making people more likely to stay.

• Keeps pace with businessContinuous conversations allow goals to evolve with business priorities. This keeps performance management relevant and aligned.

How to Make the Shift

Moving from annual reviews to continuous feedback doesn’t mean throwing out structure altogether. It means creating a system where feedback is:

• Frequent — Short, informal check-ins every week or month.

• Balanced — Recognition of strengths as well as constructive guidance.

• Actionable — Clear steps for improvement, not just vague comments.

• Two-way — A dialogue, not a one-sided evaluation.

Many organizations are blending the best of both worlds: keeping some formal checkpoints for pay and promotion discussions, while building continuous feedback into daily culture.

The Future of Performance Conversations

Performance isn’t a once-a-year event. It happens in everyday decisions, projects, and interactions. The organizations that thrive in the future will be those that embed feedback into the flow of work — making it natural, timely, and supportive.

Annual reviews had their place, but the expectations of today’s workforce demand more. Continuous feedback is no longer a “nice to have” — it’s becoming the standard for high-performing, people-focused organizations.

Does your organization still use annual reviews, or have you shifted toward continuous feedback? What has worked best in your experience?