Annual performance reviews are riddled with flaws—here’s how workplaces could reimagine employee evaluations

By Azure GilmanDeputy Leadership Editor
Azure GilmanDeputy Leadership Editor

Azure Gilman is the former deputy editor for the Leadership desk at Fortune, assigning and editing stories about the workplace and the C-suite.

Brit MorseBy Brit MorseLeadership Reporter
Brit MorseLeadership Reporter

Brit Morse is a former Leadership reporter at Fortune, covering workplace trends and the C-suite. She also writes CHRO Daily, Fortune’s flagship newsletter for HR professionals and corporate leaders.

Workers upset during performance review.
Performance reviews may be outdated and ineffective compared to other emerging evaluation strategies.
Getty Images

Good morning!

As the year winds down and companies take stock of their victories and defeats, many workplaces are gearing up for a dreaded annual tradition: the performance review

That’s when employees are supposed to reflect on their accomplishments, and areas where they could improve. The meeting usually also provides workers with their clearest opportunity to ask for a raise. That’s all well and good in theory, but it doesn’t always go according to plan, writes my colleague Emma Burleigh.

“No one really likes to rank themselves and write about their own successes and shortcomings. You’re doing it once a year, you’re trying to remember what you did, because this is your one chance to try and to get a bonus,” Dan Kaplan, senior CHRO client partner for Korn Ferry, a consulting firm, tells Fortune. “It’s a very clunky, cumbersome, time-consuming, uncomfortable process.”

Annual performance reviews are wildly unpopular, not just with employees but among managers as well. They can be abused by companies looking to get rid of people for any number of reasons, rather than taking actual steps to terminate a worker. And they also allow more opportunity for employees to continue practicing bad work habits if managers wait until a far-away future moment to tell them what isn’t working.

That’s why more and more companies are leaning into continuous feedback, something that has become particularly important when it comes to managing remote or hybrid teams. More frequent check-ins allow managers to build rapport with staffers, and it gives employees more opportunity to change patterns that aren’t working. It also moves more towards a player-coach model of doing business, something that’s increasingly attractive to corporate America.

“The biggest advantage is you build trust,” Susan Stehlik, professor of management communication at New York University Stern, tells Fortune. “And you start building real team bonding.”

You can read more about the trouble with performance reviews here

Azure Gilman
azure.gilman@fortune.com

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