Why Annual Appraisals Don’t Work Anymore
For decades, annual performance appraisals have been treated as a cornerstone of people management. Calendars are blocked, forms are filled, and ratings are debated—and yet, both employees and managers often walk away dissatisfied.
In today’s fast-moving work environment, annual appraisals are no longer just ineffective. They are actively misaligned with how people work, learn, and perform.
The World of Work Has Changed—Appraisals Haven’t
Annual appraisals were designed for a time when roles were stable, hierarchies were rigid, and change was slow. Performance could be reviewed once a year because priorities didn’t shift frequently.
That reality no longer exists.
Today, roles evolve constantly. Goals change quarter to quarter. Teams collaborate across functions, geographies, and time zones. In such an environment, reviewing performance once a year is like checking a GPS only after reaching the destination.
Feedback delayed is feedback denied.
1. Annual Feedback Is Too Late to Matter
One of the biggest flaws of annual appraisals is timing.
When feedback is given months after an event:
- Context is lost
- Behaviour patterns are already ingrained
- Learning opportunities have passed
Employees cannot improve what they are not made aware of in real time. By the time an appraisal conversation happens, the chance to correct, reinforce, or redirect performance has long disappeared.
Performance improves through course correction—not post-mortems.
2. Ratings Create Anxiety, Not Growth
Traditional appraisal systems rely heavily on ratings. While intended to create objectivity, ratings often do the opposite.
They shift the focus from development to defense.
Employees begin to:
- Play safe instead of taking initiative
- Prioritise visibility over value
- Compete internally rather than collaborate
Instead of asking, “How can I improve?” people start asking, “How will this affect my rating?”
Growth cannot thrive in a fear-based system.
3. One Conversation Cannot Capture a Year of Work
Performance is dynamic, not static.
An employee may struggle early in the year, grow significantly mid-year, and peak towards the end. Annual appraisals compress this entire journey into a single conversation, often dominated by recent events.
This creates:
- Recency bias
- Incomplete evaluations
- Frustration on both sides
A year’s worth of effort cannot be fairly assessed in one meeting.
4. Managers Are Not Trained for High-Quality Appraisal Conversations
Many managers are promoted for technical expertise—not people leadership.
Annual appraisals require nuanced skills:
- Giving constructive feedback
- Navigating emotional responses
- Separating behaviour from identity
- Balancing empathy with accountability
Without proper training, appraisal conversations often become awkward, rushed, or overly generic. This further erodes trust in the process.
When feedback feels scripted or superficial, employees disengage.
5. Annual Appraisals Focus on the Past, Not the Future
Another fundamental problem: annual appraisals are backward-looking.
They analyse what happened but rarely address what’s next.
High-performing organisations shift the focus from evaluation to evolution—helping employees understand:
- Where they are now
- What skills they need next
- How the organisation will support their growth
Performance conversations should energise people, not exhaust them.
What Works Better Than Annual Appraisals
Forward-thinking organisations are replacing annual appraisals with continuous performance conversations.
This approach includes:
- Regular one-on-one check-ins
- Ongoing feedback loops
- Clear, short-term goals
- Real-time recognition and course correction
Frequent conversations reduce surprises, build trust, and create psychological safety.
Performance improves when feedback becomes normal—not intimidating.
The Real Issue Isn’t Appraisals—It’s the Mindset
The problem isn’t that organisations measure performance. Measurement matters.
The problem is treating performance management as an event instead of a relationship.
Employees don’t need annual judgment.
They need ongoing clarity, support, and direction.
Another overlooked issue is consistency. Annual appraisals rely heavily on memory, documentation, and subjective recall. This often leads to unconscious bias, favouritism, or uneven evaluations across teams. Continuous feedback reduces this risk by grounding performance discussions in real, observable behaviour over time and creating fairness, transparency, and credibility across performance decisions organisation-wide.
Final Thought
Annual appraisals don’t fail because employees resist feedback.
They fail because the system delays it, distorts it, and disconnects it from growth.
Organisations that want higher performance, stronger engagement, and better retention must move beyond outdated appraisal models.
The future of performance management isn’t annual.
It’s continuous, conversational, and built on trust.
