An annual appraisal gives managers permission to postpone management: avoid the conversation for eleven months, then fill in a form in month twelve. Replace it with a job scorecard, a behavioural framework, weekly 1:1s and a proper progress review twice a year.
A senior manager at a major bank worked hard all year and checked in regularly with her boss. Nothing sounded wrong.
At the appraisal, she discovered the objectives she’d been given halfway through the year no longer counted. Problems had apparently been building since spring. Twelve months of work were written off in an hour.
The feedback wasn’t cruel. It was useless, because it arrived after she could do anything about it. Had her boss said it in March, she could have changed the result. His silence became her performance problem.
I binned annual appraisals in every business I ran. I’d spent years doing them badly: filling in the form the night before, softening the one point that mattered, then leaving relieved because nobody was upset.
It felt humane. It was cowardly.
An annual appraisal is one meeting expected to judge performance, discuss pay, set goals and record development needs. In other words, one conversation is asked to do a year’s management.
Why do annual performance reviews fail?
Because they combine delay, money and opinion.
Feedback about something that happened nine months ago is history, not management. The employee can’t change the work and the manager is reconstructing it from memory. The last few weeks usually win.
Now add money. Once the same conversation decides somebody’s salary, they stop listening for ways to improve and start defending their income.
Finally, add a rating. Scullen, Mount and Goff studied two samples of more than two thousand people. The person giving the rating explained 62% of the variance in one sample and 53% in the other. The rating described the manager more than the employee.
Does the evidence prove annual appraisals don’t work?
No. I expected it to. The research says something more awkward.
Kevin Murphy and Angelo DeNisi have studied appraisal for four decades and argue against getting rid of it. Yet their 2023 defence contains this concession:
There is surprisingly little evidence that performance management has any real effect on the performance of employees or on the effectiveness of organizations.
Murphy and DeNisi, IIM Ranchi Journal of Management Studies, 2023
This is where the easy “ditch appraisals” argument falls apart. CEB found performance and engagement fell in organisations that removed ratings. Facebook found 87% of its employees wanted ratings to stay. Remove the form without changing the manager and silence can get worse.
Build the replacement before you remove the old system.
Is twelve months the real problem?
It’s the worst interval researchers tested. A meta-analysis of 24 studies found that direct-report feedback improved more than twice as much when the gap was under a year.
Feedback has a shelf life. Close to the work, it’s specific and fixable. Leave it for months and it turns into a story about the person.
Imagine weighing yourself once a year. You wouldn’t get a health system. You’d get a surprise and an argument with the scales. Add an HR form and the same delay suddenly looks official.
“Every business I have run, I binned the annual appraisal. Not once did anyone ask for it back. People want to know where they stand this week, not next February.”
Dominic Monkhouse, founder of Monkhouse & Company, former Managing Director of Rackspace UK and Peer 1 Hosting
Hiring the wrong people keeps you in the weeds.
Why has the annual appraisal survived?
Because it gives managers a date for the conversation they don’t want to have today.
James Ashford brought the word TRUTH to our Summit, cast in concrete and about the size of four house bricks. A difficult truth is heavy. Throw it at somebody and you’ll hurt them. Wrap it in too much padding and they’ll never receive it. A manager’s job is to hand it over properly.
The annual appraisal makes a third option look legitimate: leave it on the floor until February.
I’ve run the same test with thousands of people. Ask whether they’d tell me I had spinach in my teeth and 30% say no. Make it my fly being undone and 50% stay quiet. Make it body odour and 70% say nothing.
The fact didn’t change. The personal risk did. Telling somebody their performance isn’t good enough sits somewhere beyond body odour.
Meanwhile, the ritual eats real time. Deloitte counted close to two million hours a year. Adobe counted 80,000 manager hours. What are you buying with yours?
What should replace annual performance appraisals?
Don’t replace one annual appraisal with fifty-two smaller appraisals. That’s the obvious trap.
The real move is to give each job its own tool: a scorecard for the result, a behavioural framework for how the work gets done and a weekly 1:1 for reality while it’s fresh. Keep a considered progress review twice a year. Discuss pay on a different day.
What does a job performance scorecard do?
It makes the judgement before the year begins. If you can’t describe a good year in advance, you can’t judge one fairly afterwards. Write down the outcomes, KPIs, responsibilities and skills before you screen a candidate, then put the scorecard on the table every week.
Now the employee can see the same standard as the manager. The conversation starts with evidence, not a judgement invented in February.
How do you make behaviour measurable?
Results aren’t enough. Somebody can hit the number and still damage the company. Define what ownership, candour and teamwork look like at each level. At Peer 1 Hosting, where I grew the UK team from zero to 120 people, the standard changed with seniority.
People could see what they did well and what the next level demanded. Compare that with an anonymous comment saying somebody is “not strategic enough”. What should they do differently on Monday? Nobody knows. That’s why I call anonymous 360 feedback quantified gossip.
Why does the conversation need to be weekly?
Because a written standard without regular attention is just a better-looking form.
Marcus Buckingham and Ashley Goodall report the Cisco data in Nine Lies About Work. Weekly check-ins lifted team engagement by 13% on average, while monthly check-ins cut it 5%. Fortnightly helped less, every three weeks was flat and by six weeks the detail had gone.
| Check-in frequency | Effect on team engagement |
|---|---|
| Weekly | Up 13% on average |
| Every two weeks | Up, but less than weekly |
| Every three weeks | Flat |
| Monthly | Down 5% |
| Six weeks | Too stale to be useful |
Give it thirty minutes at the same time every week. Recognise what went well, clear what is getting in the way and say what needs to change while the work is fresh.
This weekly conversation only works if it’s fed by something daily. If your team doesn’t already have a fifteen-minute daily huddle, start there first: it’s the rhythm that surfaces what the weekly one-to-one is meant to review.
Then keep a formal progress review twice a year. It should summarise six months of known conversations, not reveal a surprise.
That was our system at Peer 1: scorecard, behaviour and weekly attention. The culture sharpened, turnover dropped and managers spent more time developing people.
How do you remove annual appraisals without causing panic?
Do the work before you make the announcement:
- Write the job scorecards.
- Agree the behavioural framework.
- Train managers to run a useful weekly 1:1.
- Protect the meetings in the diary.
- Keep the twice-yearly progress review.
The new system requires managers to manage.
Adobe had managers role-play a good check-in before its change went live. Voluntary attrition then fell about 30%, while involuntary departures rose about 50%. More good people stayed. Poor performance was finally dealt with.
That is what happens when the truth stops waiting for February.
Frequently asked questions
Why are annual appraisals a waste of time?
Because they turn management into archaeology. By the time the feedback arrives, the work can’t change and memory has replaced evidence. Ratings reflect the rater as much as the employee, while linking the meeting to pay makes honesty harder. Only 14% of employees strongly agree reviews inspire them to improve. Just 26% strongly agree they are accurate.
Is there any evidence that annual appraisals improve performance?
Not enough to justify the ritual. Murphy and DeNisi defend appraisal, yet concede there is surprisingly little evidence that performance management affects employee or organisational performance. Removing ratings without a replacement has sometimes hurt performance and engagement. Use clear standards and regular conversations instead of saving everything until February.
What should replace annual performance appraisals?
Give each job its own tool. Use a scorecard to define results, a behavioural framework to define how work gets done and a weekly 1:1 to deal with reality. Keep a formal progress review twice a year. Discuss pay separately, when the employee isn’t also being asked to listen and learn.
How often should managers review employee performance?
Every week. Cisco found that fortnightly check-ins helped less, three-weekly check-ins were flat and monthly check-ins cut engagement by 5%. At six weeks, the conversation had become too general to help. Keep a considered progress review every six months, but use it to summarise known conversations rather than reveal stored-up criticism.
Are annual performance reviews legally required in the UK?
No. UK employment law requires a fair performance-management process and proper documentation before dismissal, not an annual appraisal. Notes from weekly 1:1s and twice-yearly progress reviews create a clearer record because they show what happened, what was said and whether anything changed.
How do you tell employees the annual appraisal is being abolished?
Don’t lead with what you’re taking away. Show employees what they’ll get on Monday: a weekly conversation, a written definition of good performance and a proper progress review twice a year. Train managers and publish the scorecards first. Announce the end of the annual appraisal when the replacement is already real.
What should you do next?
Don't improve the annual appraisal. Replace the rhythm that makes it necessary.
Give every role a scorecard. Make good work visible. Hold a proper 1:1 every week. Deal with problems while they are still small. Then use the six-monthly review to take stock, not spring surprises.
This is not more management. It is less drama.
If the truth matters in February, say it in February.
Four ways to take this further
- Book a call. If your appraisal system is hiding a bigger management problem, I can help you find it. No pitch. Just a clear view of what needs to change.
- Grab the book. F**k Plan B is about clear standards, strong teams and building a business that does not route every decision through you.
- Watch: 5 founder mistakes that kill growth. Five founder bottlenecks that quietly stop growth between 50 and 100 people, and how to clear them.
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Start with the feedback someone is waiting for. Give it this week.