Is the Annual Performance Review Dead?

The answer seems to be "yes" according to recent articles: Is the Annual Performance Review Dead? (this article explains how GE replaced annual evaluations with "more frequent conversations and introducing an App to help employees' managers and teammates share feedback"), Microsoft kills its hated stack rankings. Does anyone do employee reviews right?, Why Adobe Abolished The Annual Performance Review And You Should, Too or Death To The Performance Review! Long live the performance review.

The Traditional Performance Management model combines the annual evaluation of objectives, competencies and associated compensation in a coherent and elegant way:

1 Objectives are defined at the beginning of the year.

2 At year end, a meeting is held to review the achievement of the objectives and assess progress in relevant competencies for the job. The appraisals are subject to a forced distribution to ensure not everyone is a "high performer".

3 Then, the evaluation determines variable and fixed remuneration and promotion possibilities.

According to the CEB Global statistics included in the above-mentioned articles, 95% of the managers interviewed are dissatisfied with the process and 59% of the employees feel it is not worth the time invested.

Moreover, the current business environment is too dynamic for an objective system based on an annual cycle.

A New Paradigm is emerging based on Continuous Assessment where:

1 Objectives are defined ... when appropriate according to business needs.

2 Feedback about the degree of accomplishment of objectives, competencies and performance is continuous.

3 Compensation process is separated formally and timewise from performance process.


The change does not come without risks but the trend seems unstoppable.

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