Companies Keep Annual Reviews Despite 80% Employee Discontent and 1-in-3 Risk of Worse Performance
Updated
Updated · Business Insider · Aug 24
Companies Keep Annual Reviews Despite 80% Employee Discontent and 1-in-3 Risk of Worse Performance
2 articles · Updated · Business Insider · Aug 24
Summary
Only 2 in 10 employees say their company’s performance management motivates them, yet many employers still rely on annual reviews because they are easier to administer than continuous feedback.
Research cited in the report says one-third of traditional feedback systems actually worsen performance, while annual reviews often look backward, create anxiety, and burden overstretched middle managers.
The model had been losing ground—about one-third of U.S. companies had dropped traditional reviews by the mid-2010s—but pandemic disruption pushed many firms back to once-a-year evaluations.
Some companies are testing alternatives instead: HubSpot uses quarterly check-ins and AI tools to support conversations, while e.l.f. Beauty separates twice-yearly pay and promotion decisions from ongoing feedback.
Experts quoted in the report say regular human check-ins—weekly or biweekly—improve engagement more than scores do, even as AI risks automating the paperwork rather than the support employees actually need.