Future of Work #3: "The Death of the Annual Review: What Smart Companies Do Instead"
Why waiting twelve months to tell someone they're doing a good job is about as useful as a chocolate teapot.
Remember that annual review? The one where you sit across from your manager, both of you armed with forms that somehow capture your entire year in tick boxes and numerical ratings. They ask about goals you set twelve months ago (which honestly feel like they were written by a different person). You discuss achievements that happened so long ago you need to check your calendar and the oldest scribbles in your notebook to remember the details.
It's a bit mad when you think about it.
Most companies still do this silly dance once a year. They spend weeks preparing documents, scheduling meetings, and having awkward conversations about performance from months ago. Then everyone breathes a sigh of relief and ignores the whole thing until next year.
But here's the thing - some companies have worked out that this system doesn't actually help anyone.
Why Annual Reviews Don't Work
The problem with annual reviews isn't that managers are lazy or employees don't care. The problem is timing.
Imagine if your football coach only gave you feedback once a year. Or if your driving instructor waited twelve months to tell you about that parallel parking issue. You'd never improve, would you?
Work is the same. People need to know how they're doing while they're actually doing it. Not six months later when the project has finished and moved on.
Annual reviews also create this weird pressure to remember everything. Managers scramble to recall what happened, likely focusing on recent events because they're easier to remember. Employees spend hours writing self-assessments, trying to make their work sound impressive (how do you make compiling a spreadsheet sound impressive? - free 12 month paid membership for the best answer) months after the fact.
And let's be honest - by the time you're having that annual conversation, it's often too late to change anything meaningful.
What Smart Companies Do Instead
The companies that have figured this out do something different. They've binned the big annual event and replaced it with ongoing conversations.
Microsoft stopped doing annual reviews in 2014. Instead, their managers have regular conversations with their teams about goals, development, and feedback. These aren't formal meetings with forms to fill out. They're just normal conversations about work.
Adobe did something similar. They replaced their annual review process with quarterly check-ins and ongoing feedback. Their people report feeling more supported and less stressed about performance discussions.
The key difference? These conversations happen when they're actually useful.
How to Make the Change
If you're thinking about ditching annual reviews (go you!), start small. You don't need to overhaul everything at once.
Begin with monthly one-to-ones. Not performance reviews - just regular conversations between managers and their teams. Talk about current projects, upcoming challenges, and how people are feeling about their work. WRITE STUFF DOWN.
Make feedback immediate. When someone does good work, tell them straight away. When something needs improving, address it in the moment rather than saving it for later. IMMEDIATELY.
Set shorter-term goals. Instead of annual objectives that become irrelevant by March, try quarterly goals that can adapt as priorities change and always try and link them to company goals, so people understand how their goals are helping the company.
Train your managers to have better conversations. Many people become managers without learning how to give useful feedback or have meaningful discussions about development. This isn't their fault - they just need support to learn these skills.
You Need New Habits
You do not need new software, just a few habits.
Shrink the cycle. Replace twelve-month targets with ninety-day ones. Keep them on one page. If a page feels cramped, the goals are too many.
Train managers to ask, not tell. A prompt as simple as “What should I know about your week?” invites honest talk.
Normalise quick praise. Spot a job well done, say so within the hour. Slack, email, a nod across the desk—speed beats grandeur.
Pair feedback with support. When a task slips, ask what blocked it. Offer time, tools, or another pair of hands. Fix the block; the worker fixes the task.
Hold quarterly career chats. No scores, no ranking. Ask where the person wants to grow and how you can help. Write the actions, not the adjectives.
Review the system, not the person. If three people miss a goal, the goal was wrong. Adjust it rather than scold them.
Start small. Pilot with one team for two quarters. Let their experience shape the wider roll-out. Fancy slide decks can wait.
The Continuous Feedback Approach
Here's what continuous feedback looks like in practice:
Your team member finishes a presentation. Instead of waiting until their annual review to mention it was brilliant, you tell them that afternoon. You also mention that one slide could be clearer next time.
Someone's struggling with a new process. Rather than noting it down for their end-of-year discussion, you offer help immediately and show them a different approach.
Goals change because priorities shift. Instead of stubbornly sticking to January's objectives, you adjust them in July when the business needs something different.
This approach respects the fact that work is constantly evolving. People grow and change. Projects shift direction. Markets move. Annual reviews pretend everything stays the same for twelve months (spoiler: they don’t).
Making It Real
The shift from annual reviews to continuous feedback isn't just about changing a process. It's about changing how you think about supporting people at work.
Instead of judging performance once a year, you're helping people improve every day. Instead of looking backwards at what happened, you're looking forward at what's possible.
This takes more effort from managers, true (but not much more and the benefits outweigh the effort). But it's effort spent on actually helping people rather than completing forms. And when people feel supported in their day-to-day work, they don't need annual validation to know they're doing well.
The annual review served its purpose for a while. But like many workplace traditions, it's time to let it go and do something better instead.
Your people deserve feedback that actually helps them. Not once a year, but whenever they need it.
Seen a smarter way to scrap the annual pantomime? Hit reply—curiosity beats certainty every day.