Why Performance Reviews Don’t Work—and What You Should Do Instead
Think back to this time last year. You were hopeful, optimistic, and ready to tackle the year ahead. Maybe you had big goals for your team—projects to complete, milestones to hit, and growth targets to reach. You sat down for your annual performance reviews with employees, eager to align on expectations and set the stage for success.
But as the months passed, did those goals get achieved? Did the feedback and plans from those reviews translate into meaningful change? Or did things slip through the cracks, with performance reviews becoming little more than an annual checkbox exercise?
For many business owners and managers, the answer is frustrating. Despite the time and energy spent on reviews, the results often don’t match the effort. Employees may nod and agree during the meeting, only to leave feeling unmotivated, unclear, or even resentful. Managers, too, can feel deflated, sensing they’ve done little to move the needle on performance or engagement.
This time of year offers a chance to pause and reflect. What went right? What didn’t? And perhaps most importantly, what could you do differently in the year ahead to make these conversations more impactful?
Here’s why traditional performance reviews often fall short—and what you can do to transform your approach to drive real results for your business.
The Flaws of Traditional Performance REviews
Inaccurate and Biased Evaluations Performance reviews are often riddled with bias. Managers might rely on recent events rather than considering an employee’s performance over the entire review period (recency bias), or let their personal preferences cloud their judgment (halo effect). These subjective assessments can feel arbitrary to employees and do little to foster trust.
Fluff and Unproductive Feedback One of the biggest issues with performance reviews is that many managers don’t know how to give meaningful feedback. Instead of offering clear, actionable insights, managers often resort to vague, feel-good statements like, “You’re doing fine,” or overly critical remarks that demoralize rather than motivate.
Focus on Personality Instead of Job-Related Skills Performance reviews often veer into personal criticism, focusing on personality traits instead of job-related skills and behaviors. For example, labeling someone as “too emotional” or “not assertive enough” is neither constructive nor actionable.
Fear and Anxiety Among Employees Traditional performance reviews create stress. Employees worry about receiving negative feedback or being blindsided by criticisms that were never discussed during the year. This fear can stifle open communication and undermine trust between employees and managers.
Managers Lack Training Many managers are not trained to provide effective feedback or conduct meaningful performance conversations. This lack of training results in inconsistent messaging, unclear expectations, and missed opportunities for employee development. In turn, employees feel unsupported and undervalued.
What Organizations Should Do Instead
Shift to Continuous Feedback Annual reviews are often too little, too late. Instead, organizations should implement a system of regular check-ins between managers and employees. These ongoing conversations allow for immediate feedback and course correction, keeping employees aligned with their goals and engaged in their work.
Train Managers to Deliver Feedback Effectively Feedback is only valuable if it’s actionable. Organizations need to train managers to give clear, constructive feedback that is specific, timely, and tied to tangible goals. Feedback should include:
Focus on Job-Related Skills, Not Personality Feedback should always tie back to the employee’s role, responsibilities, and measurable performance outcomes. Managers should avoid subjective judgments or labeling and instead frame feedback around actions and behaviors.
Focus on Development, Not Evaluation Instead of centering reviews around assigning grades or scores, shift the focus to employee development. Managers should act as coaches, guiding employees toward growth opportunities, providing resources, and helping them set and achieve their professional goals.
Measure the Success of Feedback Organizations should track the effectiveness of their performance management processes. Are employees implementing feedback? Are managers consistently having productive conversations? By measuring outcomes, organizations can refine their approach and ensure that the process drives results.
Should You Get Rid of Performance Reviews?
The solution isn’t necessarily to eliminate performance reviews but to evolve them into something that actually works. Here’s how:
Make feedback continuous. Annual reviews should be supplemented—or replaced—with regular, ongoing conversations.
Train your managers. Equip them with the skills and tools they need to deliver meaningful, actionable feedback.
Focus on skills and behaviors. Feedback should always be tied to the role, not the individual’s personality.
Create centralized resources. A feedback support system ensures consistency and gives managers the guidance they need to be effective.
Focus on growth. Shift the emphasis from “evaluating” employees to supporting their professional development.
Performance reviews in their traditional format are outdated, but with the right adjustments, they can become a valuable tool for fostering engagement, development, and organizational success. It’s time to stop relying on ineffective methods and start building a feedback culture that truly supports employees and managers alike.