Transitioning to a More Agile Performance Review System

Most performance reviews try to do two jobs at once: 1️⃣ Pick between people for pay, promotion, and roles. 2️⃣ Develop people by finding strengths and gaps. These goals pull in opposite directions. Why this clash happens (brain + math): 🧠 Brain: When a review affects your pay or job, your brain reads it as a threat. Stress goes up. Learning shuts down. Feedback feels like a warning, not help. 🔢 Math: If you focus on ranking people clearly, everyone’s profile looks the same and you lose detail about strengths and weaknesses. If you focus on rich, detailed feedback, clear rankings get fuzzy. You can’t optimize both at the same time. The fix isn’t “blend them better.” You need a third way. Build two separate tracks with different goals, timing, and rules. Track A — Allocate (between people) - Purpose: pay, promotion, role, and staffing decisions. - Timing: set times (e.g., twice a year). - Evidence: common criteria and comparisons across people. - Norms: fairness, consistency, clear documentation. Track B — Develop (within people) - Purpose: growth, new skills, behavior change. - Timing: ongoing, low‑stakes coaching in regular 1:1s. - Evidence: specific behaviors and goals; focus on the future (“feedforward”). - Norms: psychological safety, curiosity, experimentation. Design moves that make it work: 👉 Separate the moments: Never mix ratings or money talks with coaching time. 👉 Separate the artifacts: Use different forms and language for each track. 👉 Separate the roles: Talent review leaders handle Track A; managers/peers coach in Track B. 👉 Give employees a voice: Enable upward feedback and self‑nominations for growth or promotion. 👉 Aim at behavior and the future: Be specific about what to try next, not who someone “is.” Employee gut‑check: “Is this feedback or a warning?” If people can’t tell, the system isn’t truly separate yet. When we honor the polarity—allocate separately, develop safely—performance management can actually serve both business goals. #EmployeeExperience #PerformanceManagement #Leadership #HR

It's that time again. The dreaded annual performance review. Annual performance reviews are undeniably ineffective. (Yes, I’m an “HR person” putting a nail in the coffin of an activity that’s been our swan-song for eons….)    Survey after notable survey have reported that nearly every manager AND employee questioned believe that annual performance reviews weren’t effective or useful.    My friends, the traditional process is flawed.    Why?    First, the traditional review process focuses on the past rather than the future. This backward-looking conversation has shown to demotivate employees. (And, who really remembers what they did 11 months ago!? Raise your hand if you’ve reviewed your calendar from the past 12-months to remember what you did and accomplished? 🙋♀️)    So, how do you hold staff accountable while avoiding a cumbersome (and demoralizing) conversation?    Here’s the deal -    Employees prefer consistent, timely feedback to address roadblocks, receive recognition, and build a foundation of trust with their leaders. That’s why a less formal, more consistent approach to performance management benefits employee, team, and business success.    So, what should the process be?     1. 𝗠𝗼𝗻𝘁𝗵𝗹𝘆 𝗢𝗻𝗲-𝗼𝗻-𝗼𝗻𝗲𝘀  These informal meetings serve as an opportunity to recognize employees for their hard work, assess roadblocks, and coach performance. Regular one-on-ones help managers evaluate results as they come, not months later. That way, you can correct ineffective processes before they become a habit.    2. 𝗤𝘂𝗮𝗿𝘁𝗲𝗿𝗹𝘆 𝗰𝗵𝗲𝗰𝗸-𝗶𝗻𝘀  Quarterly checks are a great supplement to your one-on-one opportunities. These can be more formal.    3. 𝗖𝗼𝗻𝘁𝗶𝗻𝘂𝗼𝘂𝘀, 𝘁𝘄𝗼-𝘄𝗮𝘆 𝗳𝗲𝗲𝗱𝗯𝗮𝗰𝗸  This enables both employees and managers to ask for feedback. Not only does this make employees feel like their opinions matter, but it gives managers the insight they need to improve the employee experience and grow as a leader. In addition, your employees will be more likely to accept feedback without hesitation when it goes both ways.    4. 𝗖𝗮𝗿𝗲𝗲𝗿 𝗱𝗲𝘃𝗲𝗹𝗼𝗽𝗺𝗲𝗻𝘁 𝗰𝗼𝗻𝘃𝗲𝗿𝘀𝗮𝘁𝗶𝗼𝗻𝘀  Career development conversations help employees and managers align on the future. These conversations allow managers to recognize employee talent. When you show an employee that they are valued, you’ll be able to bring out their full potential.    The war for talent is real. It’s critical for leaders to establish a routine where expectations are clear, direct feedback is delivered real-time, and career development is actively supported.    How do you review your employees? And as an employee, how would you like to be reviewed?

Maybe it’s time to start over One of the CEOs I’m coaching recently called me, exasperated. He’d just come out of another round of mid-year performance reviews. He described the ritual we all know too well: Goals set in January that everyone forgot by March. Feedback requests nobody wanted to give - or receive. Self-reviews that sounded like a mix of sales pitches and confessions. Calibration sessions behind closed doors where people who barely knew the work decided who was “exceeds,” “meets,” or “below.” Development plans destined to sit untouched in the HR system. “And then,” he said, “we all acted surprised that nothing has changed.” He paused. “Why are we still doing this?” It was the question that most leaders think but rarely voice. I asked him: “Do you believe this process is actually salvageable?” There was a long silence. “I don’t know,” he admitted. “We’ve tried everything - simplifying the form, shortening the cycle, training managers to be better coaches. It still feels broken.” Then he said something that made me sit up straight: “What if we just started over? Blow it up if we have to. Let’s build something that actually changes behavior, not just records it. Because honestly, when was the last time a performance review changed how you or I showed up the next day?” That’s when it clicked. This CEO didn’t care about performance reviews. He cared about performance. He cared about the conversations people actually need to have: The hard truths no one says out loud. The recognition people crave. The clarity on where they stand and how to grow. Making all their work visible - not just what someone remembers from last month. It’s about designing a performance culture where feedback is real-time, usable, and impactful, not an annual (or semi-annual) box-ticking exercise. So here’s my question for every leader reading this: Why do we keep pretending this broken system will suddenly start working? If you could start from scratch, what would you build instead? What if we designed something that: Made feedback an everyday habit, not an annual ritual. Valued growth as much as outcomes. Treated people like adults who want clarity, not just scores. Captured real-time data to truly see everyone’s impact. Tied pay to market value and role scope - instead of using flawed ratings to justify it. That CEO stopped tweaking around the edges. He’s building something new, and he’s given his HR team permission to rethink everything. It may be imperfect at first. But it will be built for how the business needs to excel. And that’s what matters in today's workplace - impact, not activity. If you’ve ever blown up your performance process, or even thought about it, I’d love to hear your story. Maybe this is the year we finally stop pretending that performance reviews actually drive performance.

I thought annual reviews worked. I was wrong. Let's face it, the traditional annual review model is inherently flawed. It's a retrospective look at a year's worth of work, cramming recognition, feedback, and development into a single conversation. This approach can lead to a number of issues, such as recency bias, where the most recent events overshadow the rest of the year, and a lack of timely feedback, which keeps people from being able to improve immediately and ultimately, to grow. Even more, this once-a-year meeting can create unnecessary stress for both employees and managers, turning what should be a constructive dialogue into a dreaded event. In my journey with HRuprise, I've seen firsthand how continuous feedback models have transformed workplaces. These models foster a culture of ongoing communication and support, where feedback is given and received in real-time, allowing for immediate adjustments and growth. This approach not only reduces the anxiety associated with annual reviews but also builds stronger, more transparent relationships between team members and managers. Another revelation was the power of aligning individual goals with company objectives continuously throughout the year. This alignment ensures that everyone is moving in the same direction, with clear expectations and understanding of their contributions to the company's success. It turns out, the annual review's once-a-year goal setting is too infrequent to effectively respond to the fast-paced changes most businesses face today. I also underestimated the importance of personal development in the review process. Traditional reviews often focus heavily on past performance and what an employee can do for the company in the coming year. However, they frequently neglect the employee's own career aspirations and development needs. By shifting the focus to include these elements, we not only help individuals grow but also increase their engagement and loyalty to the company. Implementing a more fluid, ongoing feedback system doesn't come without its challenges. It requires a shift in company culture, training for managers, and the implementation of new tools and processes to support continuous feedback. But the benefits far outweigh the initial investment and effort. Companies that embrace this model often see improvements in employee satisfaction, productivity, and retention. So, where do I stand now? It's clear that the annual review model, as it traditionally exists, is outdated and ineffective for the modern workplace. The future of HR lies in creating environments where feedback is continuous, goals are aligned and flexible, and personal development is prioritized. This approach not only benefits employees but also contributes to the overall success and adaptability of the business. In retrospect, I'm grateful for the shift in my perspective. It's been a humbling reminder that the field of HR is always evolving, and so must we.

Teams with continuous feedback programs show 23% higher profitability and 18% greater productivity than those relying on outdated annual performance reviews. AI ALPI research has uncovered a critical shift in top-performing HR departments. While 76% of organizations still rely on annual reviews, market leaders are leveraging technology-enabled continuous feedback loops that drive real business outcomes. → Weekly micro-feedback sessions are replacing quarterly or annual reviews, creating psychological safety and real-time course correction ↳ This approach reduces employee anxiety and creates 3x more actionable insights than traditional methods → AI-powered tools now enable performance tracking without the administrative burden ↳ HR leaders implementing these systems report 42% reduction in management time spent on performance administration → Human-centered leadership training has become a critical enabler ↳ Organizations investing in empathy-driven feedback skills see 37% higher retention rates among high performers Companies that implemented continuous feedback systems initially saw a temporary 15% drop in satisfaction as managers adjusted to more frequent, meaningful conversations. By month three, both engagement and productivity metrics surpassed previous levels by significant margins. 🔥 Want more breakdowns like this? Follow along for insights on: → Getting started with AI in HR teams → Scaling AI adoption across HR functions → Building AI competency in HR departments → Taking HR AI platforms to enterprise market → Developing HR AI products that solve real problems #ContinuousFeedback #HRTech #FutureOfWork #LeadershipDevelopment #PerformanceManagement