Why Annual Reviews are OUT, and Continuous Feedback is IN - Dignify
Log In Try Dignify

Why Annual Reviews are OUT, and Continuous Feedback is IN

Wednesday, December 27, 2023 - Dignify

Leader giving continuous feedback instead of an annual review

Going into 2024, workplace leaders should have no illusions – the annual review is no longer enough. Today and tomorrow’s employees and job seekers are not looking to work in teams with leaders that withhold their feedback for a single end-of-the-year review.

In a highly competitive and difficult labor market, it’s prudent for employers and leaders to adjust as much as they can to the wants and needs of the market without compromising on performance and competency.

Rest assured – ditching the annual review as the be-all end-all of employee feedback won’t impede performance. If it’s replaced or augmented with something more (which we will dig into below), it can only serve to bolster or create a high-performance culture.

At the same time, it will satisfy one of the most commonly expressed needs of employees today – the need for consistent feedback. Bolstering performance and satisfying employees makes this a win-win solution, so it’s no wonder why some of the world’s largest companies are changing their approach to feedback. So, let’s dig into it.

Michael Blanding, writing for Harvard Business School, shed light on another international survey which found that 72% of respondents rated feedback from their manager as important to their career development, yet only 5% of employees believe managers provide that feedback.

There’s a clear gap between what people want, and what they’re getting. Benham Tabrizi writes that companies like Netflix, Apple, and Microsoft are stepping away from annual/quarterly reviews (and employee ranking) entirely, resulting in greater trust, collaboration, satisfaction, and productivity.

Other companies such as Amazon and Tesla have re-vamped their annual reviews. Tesla’s annual reviews come in addition to continual feedback, while Amazon utilizes their reviews to promote their company values.

Meanwhile, Tabrizi continues, companies that stick to the old norm, like ExxonMobil, have fallen behind the curve. Employees there describe a culture and environment that is fear-ridden, unsatisfying, rigid, and slow to innovate.

To an extent, it’s understandable that the annual review has stuck around for so long. As Michael Blanding explains, it’s comfortable. Harvard professor Francesca Gino, UC Berkeley associate professor Juliana Schroeder, and Harvard Business School doctoral students Nicole Abi-Esber and Jennifer Abel conducted a study that found that people are significantly less keen to give feedback than they are to receive it. The annual review allows leaders and managers to avoid the discomfort of giving feedback for most of the year and compartmentalize it into a one-and-done meeting.

Coincidentally, those same researchers found that despite some discomfort, the interactions went better than expected because the feedback receivers genuinely wanted to hear the feedback givers’ advice and perspective.

Feedback delivery is a skill that can be developed and improved through leadership training and coaching. It’s essential to ensure that your leading personnel are prepared and empowered to make the stark transition from annual reviews to regular feedback so that the company and all of its employees can glean the most added value possible from the change.

Training can also go a long way in helping leaders re-frame the purpose of their annual reviews as a part of their feedback loop. A leadership coach can train their clients on how to use the annual review to promote company values, have financial conversations, and more.

With continuous feedback implemented into your company, you’ll satisfy one of today’s employees’ greatest needs, empower your staff to constantly improve, and present as a significantly more attractive option to job seekers.

Blanding, Michael. “Why People Crave Feedback – and Why We’re Afraid to Give It” [Article]. 5 August, 2022. Harvard Business School. https://hbswk.hbs.edu/item/why-people-crave-feedback-and-why-were-afraid-to-give-it [Accessed November 13, 2023].

Tabrizi, Benham. “Why the performance review is dying out – including at companies like Apple and Microsoft” [Article]. 24 August, 2023. Fast Company. https://www.fastcompany.com/90943074/why-the-performance-review-is-dying-out-including-at-companies-like-apple-and-microsoft [Accessed November 13, 2023]

More Articles

Sometimes, all it takes is a little inspiration.

Understanding where others are coming from is critical in communicating and working toward a common cause.