Why annual appraisals are a waste of time (and what to do instead)
Let’s talk about the annual performance appraisal. Yep, that awkward ritual where you sit down with your manager to relive the past year like it’s a Netflix series recap. You walk in thinking, “Hey, I crushed it this year,” only to leave wondering if you’ve been living in an alternate reality. The “feedback” lands like a sucker punch: you didn’t meet expectations. You fell short. And the kicker? This is the first time you’ve heard about it.
Sound familiar? Unfortunately, it’s a scene straight out of the corporate playbook. Just last week, I spoke with a senior manager at a major bank who was still reeling from this exact scenario. They’d been hustling hard for a whole year, assuming everything was on track. After all, they’d had multiple check-ins with their boss—so far, so good, right? But nope. When appraisal time came around, they were blindsided. The feedback wasn’t just disappointing; it was downright demoralizing. And those new objectives they’d been handed mid-year? A complete waste of time in hindsight.
Here’s the thing: I’ve never been a fan of annual performance appraisals. Scratch that—I despise them. I’ve spent years in business, and I have yet to see one shred of evidence that proves they actually improve performance. Not one.
So why do we keep this broken system on life support? Honestly, I think it’s just corporate inertia. Like believing in astrology or detox diets, people adopt habits and norms without ever stopping to ask, “Wait, does this even work?” Annual appraisals fall into that same category: big companies do them, so smaller ones copy-paste the process without questioning it.
But let’s face it—this isn’t a harmless tradition; it’s a colossal waste of time and energy. So, what’s the real problem with annual appraisals? And more importantly, if we ditched them, what could we do instead? Drawing from my experience leading forward-thinking tech teams, I’ve got some ideas. Let’s break it down.
Understanding Performance Appraisals
Performance appraisals: love ’em or loathe ’em; they’re the bread and butter of effective employee performance management. Think of them as the official scoreboard for how well someone’s doing at work and what they’re bringing to the table. Sure, it’s formal, but the heart of the process? It’s all about feedback—hopefully the kind that actually helps people up their game, tackle their weaker spots, and sharpen their skills.
When done right, performance appraisals give organisations a crystal-clear picture of who’s ready for the next big thing—be it a promotion, a raise, or some targeted development. And here’s the win-win: it’s not just about keeping employees in line with performance standards (although, yeah, that’s part of it). It’s also about helping them grow. Constructive feedback is the secret sauce here, guiding employees on the how-tos of getting better and shining brighter in their roles.
The Performance Appraisal Process
First off, let me just say this: if you’re still running annual appraisals, I’d recommend rethinking the whole setup. But if you’re determined to stick with them (and hey, sometimes it’s the best option you’ve got), let’s make sure you’re doing it in a way that actually works—for your team members and for your organisation. This process focuses on shifting the ownership to your people, letting them set their objectives and self-report their progress. It’s not something you do to them, but rather something they drive themselves, with you acting as a coach.
Here’s how to make the most of the process:
Goal Setting: The first step is to let your team members take the lead on setting their own goals. Instead of dictating objectives, encourage them to define their priorities using FAST goals—focused, aligned, specific, and transparent. This approach keeps things flexible but clear, ensuring their goals sync with organisational needs without turning into a rigid to-do list.
Performance Monitoring: Think of this as a collaborative, ongoing dialogue rather than a manager lurking in the shadows. Your role is to support their self-monitoring by staying engaged, offering feedback, and being available when they need guidance. When team members regularly check their own progress and bring updates to you, the process becomes less about micromanagement and more about mutual accountability.
Performance Evaluation: Now comes the formal review, but here’s the twist: let team members do the heavy lifting by presenting their own self-assessments. Encourage them to use documented examples—successes, challenges, and lessons learned—to show how they’ve measured up against their goals. Your job? To offer an objective lens, fill in any gaps, and keep the conversation constructive.
Feedback and Coaching: This is where the partnership really comes to life. Sit down together and talk through the evaluation. Celebrate wins, dig into areas where things could have gone better, and collaborate on solutions. Effective coaching isn’t about pointing fingers; it’s about helping them see opportunities to grow and charting a path to get there.
Development Planning: Finally, co-create a development plan that’s practical and actionable. Team members should have a big say here—after all, they know their strengths and areas for improvement better than anyone. The plan should outline clear steps, timelines, and resources to help them level up. When done right, it’s less about ticking boxes and more about building momentum for continuous growth.
Demoralising and Demotivating
Let’s be real—annual appraisals often do the exact opposite of motivating people. They can feel like a professional beatdown. Imagine hearing this: “Here’s everything you didn’t do well this year, plus some anonymous feedback from your colleagues outlining your flaws. Oh, and by the way, no pay rise or promotion for you because, well, your performance isn’t up to snuff. Better luck next year!” Inspiring stuff, right?
The problem is that companies tend to frame the whole thing as the employee’s failure: “You didn’t perform, so you don’t deserve more money.” Instead of focusing on constructive feedback and actionable steps for improvement, they tie performance to compensation in the most demotivating way possible. How is anyone supposed to feel motivated to do better when the message is basically: “You’re not good enough?”
Designed for the Organisation, Not the Employee
Let’s be real—performance appraisals often feel like they’re designed for the organisation’s benefit, not the employee’s growth. And honestly, when was the last time someone raved about how much an annual review improved their performance? Exactly. It doesn’t happen.
And then there’s the anonymous 360 review—arguably one of the worst ideas in the performance management playbook. These are supposed to foster open, honest feedback, but how does that work when no one knows who said what? Spoiler: it doesn’t. Instead of encouraging meaningful conversations, anonymous reviews create an environment of secrecy and suspicion.
What happens next? People start lobbing vague, unhelpful criticisms like, “X isn’t a team player” or “She’s not very strategic.” Seriously? What does that even mean? Does the person writing this have any idea what being “strategic” looks like? Do they care? Anonymity lets people avoid accountability for their feedback. Worse, it invites petty backstabbing and underhanded digs that do nothing but damage relationships and morale.
If feedback is going to make a difference, it needs to be transparent. Say it to their face (with kindness, of course) or don’t say it at all. Anonymity doesn’t protect people; it undermines trust and turns what could be a constructive process into a toxic one.
Annual Horizons Are Too Long
Let’s be honest—asking people to reflect on a whole year of work is like asking them to recall what they had for lunch last March. It’s a stretch. Who remembers the details? And what’s the point of telling someone they’ve been underachieving for 12 months after the fact? That ship has sailed.
Here’s what actually happens: managers, unless they’re meticulously tracking performance (spoiler: most aren’t), tend to rely on what’s freshest in their memory. That means they overemphasise the beginning and end of the year while glossing over everything in between. The result? Employees dust off last year’s appraisal, vaguely recall the conversation, realise they haven’t looked at it since, and scramble to pull together some half-baked evidence of progress. What’s the outcome? A box ticked. Time wasted.
Bring in Project-Based Feedback and OKRs
Instead of this outdated annual slog, shift to a culture of regular, actionable feedback. Start with project retrospectives—after every major project or milestone, bring teams together to talk about how things went. What worked? What didn’t? What did we promise versus what did we deliver? This kind of open conversation naturally raises people’s ‘say
’ ratio—aka, are they walking the talk? By encouraging radical candour, you create a space for honest, meaningful feedback without the anonymity nonsense.
OKRs (Objectives and Key Results) are a game-changer here. Forget sprawling annual goals; OKRs work best in 90-day bursts, or even shorter for some key results. They focus on outcomes, not just activity. Instead of vague promises like, “I’ll manage my team better,” an OKR might say, “I’ll improve team satisfaction levels from X to Y.” It’s measurable, actionable, and tracks real progress.
Pair this with performance appraisal apps, and you’ve got a way to automate the admin while keeping feedback focused, frequent, and future-oriented. That’s how you turn evaluations into something employees actually find useful—rather than an annual exercise in futility.
Introduce Job Performance Scorecards
If you want to boost motivation, performance, and overall energy levels in your team, job scorecards might just be your secret weapon. These handy tools give you a clear structure for the performance levels you expect, so everyone knows what success looks like. The result? Assessments that are consistent, objective, and transparent. Every team member can answer the crucial question: “What does a good day look like for me?”
We’ve seen scorecards revolutionise businesses. Here’s the magic: each role gets its own tailored scorecard. It’s a simple acknowledgment that every job represents an investment from the company, and that investment needs measurable outcomes. No fluff—just clarity about what the role is there to deliver.
The beauty of scorecards is in the metrics. There’s always one main number or metric that matters most, supported by a mix of leading and lagging indicators. These can be measured weekly, even daily, giving employees an objective way to track their performance. No guessing, no surprises. People know if they’re crushing it—or if they need to step it up. And leaders can see whether the company is getting solid value for its investment.
Now, compare this to traditional performance appraisals with their vague, annual objectives. Employees spend 12 months wondering if they’re winning or losing. No one thrives in that fog of uncertainty. People need clarity to stay engaged and motivated. It’s not just common sense—it’s backed by data. One of the most critical drivers of engagement in Gallup’s Q12 survey is this question: “Do I know what’s expected of me?”
With scorecards, the guesswork disappears. Employees stay focused, leaders stay informed, and everyone’s on the same page about what success looks like. It’s a game-changer.
Put in a Behavioural Framework
Do you have core values? If not, start there—because they’re the foundation of your company’s culture. Once you’ve nailed them down, use them to define the specific behaviours you want to see from your team. Why? Because without clear behavioural expectations, tricky conversations with employees become near impossible.
A behavioural framework gives everyone—from managers to staff—a shared language. It’s a tool for celebrating when people embody the values and a way to call out behaviour that’s out of line. No ambiguity, no awkwardness. It’s crystal clear what’s expected and, just as importantly, what won’t fly anymore.
When this framework is properly communicated, managers can make their feedback specific and meaningful. Instead of vague comments like, “You need to step up as a team player,” they can say, “Here’s an example of when you really supported your team—it aligned perfectly with our value of collaboration. On the flip side, here’s a moment where you missed the mark, and here’s why.” It’s direct, fair, and tied back to the core values everyone knows and (hopefully) embraces.
When I was MD at Peer 1, we introduced a leadership development framework where behavioural expectations evolved with seniority. It gave staff a roadmap: here’s what you’re doing well, and here’s what you need to work on to land that promotion. The result? Clearer feedback, better development conversations, and a culture where everyone knew exactly how to grow.
If you’re serious about improving performance, tying it to behaviours rooted in your core values is the way to go. It’s not just about what people achieve—it’s also about how they do it.
Best Practices for Effective Employee Performance Management
Let’s cut the fluff: effective performance management isn’t about ticking HR boxes or giving lukewarm feedback once a year. It’s about building a culture where people know exactly what’s expected, are held accountable, and get the support they need to level up. Here’s how to do it right:
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Ditch the Annual Feedback Rut
Annual reviews are dead. Regular, real-time feedback is the only way to keep people on track and motivated. You’re not doing anyone a favor by waiting six months to tell them they’re underperforming. Frequent, honest check-ins mean issues get resolved before they spiral—and wins get celebrated when they happen. -
Set Clear, No-Nonsense Goals
If your team doesn’t know what success looks like, how can they achieve it? Be specific, measurable, and transparent. Don’t hide behind jargon—spell it out. Clear expectations are the difference between a motivated team and a group of confused clock-punchers. -
Measure What Matters
Feel-good vibes won’t cut it. You need hard, objective metrics to evaluate performance. If you can’t measure it, you can’t manage it. Metrics don’t just hold people accountable; they give them a scoreboard to track their own progress. Numbers talk—use them. -
Invest in Development (or Lose Talent Fast)
You can’t expect employees to thrive without giving them the tools to grow. Training, mentorship, stretch assignments—whatever it takes to sharpen their skills. If you’re not investing in their growth, don’t be shocked when they leave for someone who will. -
Recognize Wins—Loudly
People crave recognition. Don’t just pat someone on the back in private—shout their successes from the rooftops. Publicly celebrating achievements doesn’t just motivate the individual; it sets the tone for your whole team. Rewards and recognition show you value their work. -
Stop Managing, Start Coaching
Your job isn’t to police performance; it’s to coach people to be their best. That means asking tough questions, giving actionable feedback, and helping them remove obstacles. Great managers don’t micromanage—they enable greatness.
The Bottom Line?
Performance management isn’t soft work—it’s strategic. If you’re not using these practices to drive real change, you’re wasting everyone’s time. Be clear. Be tough when you need to be. But most importantly, be there to help your team succeed. Anything less is just corporate theater.
And Most Importantly, Bring in Weekly 1:1 Performance Reviews
So, you’ve set the stage: frameworks like job scorecards, OKRs, project-based feedback, and a clear behavioural playbook. What’s the next step? The ultimate game-changer: weekly 1:1s. If you take only one thing from this blog, make it this—ditch the annual appraisals and bring in weekly check-ins.
Massive credit to Marcus Buckingham for proving this point in his bestseller, Nine Lies About Work. He showed how Cisco rolled out weekly 1:1s, albeit inconsistently, and the results were jaw-dropping. When managers checked in with their team members weekly, productivity soared. Monthly? It dipped. Six weeks or more? Forget it—performance actually declined. The message couldn’t be clearer: if you’re not meeting weekly, you’re better off not meeting at all.
Here’s why weekly 1:1s are so powerful. They shift managers from taskmasters to coaches. These aren’t awkward, formal reviews—they’re open, honest conversations. Team members come to the table with self-assessments, using the frameworks you’ve built to evaluate their performance and pinpoint what needs work. Together, they tackle challenges, celebrate wins, and focus on the future.
And here’s the kicker: the regular rhythm of feedback energises your people. It keeps them motivated, engaged, and crystal clear on what success looks like. No one’s waiting months—or a year—for direction or recognition. The feedback loop is tight, actionable, and aligned to what matters most.
Making this shift from annual appraisals to weekly 1:1s isn’t just a tweak; it’s a transformation. It’s how you turn performance management from a dreaded HR exercise into a tool that builds better teams and better results. So, what are you waiting for?
Written by business growth coach Dominic Monkhouse. Find out more about his work. Read his book, ‘F**k Plan B’ here