Annual review season: Still relevant or time to retire?

Opinion

Is the annual performance review facing extinction, or does it still have a role in modern agency workplace culture?

For decades, the annual 360 review has been treated as a rite of passage in the agency world. A formal pause to reflect on performance, progress and an individual’s contribution to the team and company.

Managers, peers, and direct reports are invited to weigh in, offering a panoramic view of the past year.

Yet, for a growing share of today’s workforce, this ritual feels less like reflection and more like archaeology. According to Gallup, only 14% of employees strongly agree their performance reviews inspire them to improve.

The annual review is not merely outdated; it is increasingly misaligned with how people actually work and want feedback. 

Stability versus flux

The modern workforce, particularly Millennials and Gen Z, now the largest cohorts in many organisations, want to work in collaborative – rather than siloed – roles to reach goals, are operating at a faster pace than ever and, according to PwC, are seeking frequent check-ins over annual reviews to aid career progression and personal development. 

Time is the first major fault line. Annual cycles assume stability: goals, teams, and expectations remain stable. But today’s work evolves constantly.

Asking people to summarise “the year” ignores how often priorities shift. The feedback that matters most, course correction, encouragement, challenge, and support, loses its power when delivered months after the moment has passed.

45% of employees say annual performance reviews happen too infrequently to be useful for improvement. For a generation accustomed to real-time information, delayed feedback feels irrelevant at best and dismissive at worst.

There is also a growing mismatch between how accountability works now and how reviews are designed. Many employees want accountability to their peers, not just to their manager. They care deeply about whether they are contributing meaningfully to the team and that the workload and rewards are fair.

Traditional 360 reviews claim to include peer input, but often reduce it to anonymised commentary stripped of contextual examples. What people actually want is shared ownership of outcomes, clear commitments, and open dialogue that makes accountability visible and mutual.

Leadership expectations

Expectations of leadership have also shifted. Employees are no longer looking for managers who simply review to-do lists or deliver verdicts once a year. They want managers who coach, leaders who ask good questions, remove obstacles, and help connect daily work to longer-term growth.

Coaching is ongoing, happening and adjusting in real time and future-focused. The annual review, with its forms and ratings, reinforces a managerial identity centred on assessment rather than development, and that identity no longer resonates.

This is all without considering the administrative burden and time required for annual 360 reviews, which 55% of HR professionals say take too much time.

In an environment where agility and focus are at the forefront, this kind of bureaucracy feels increasingly out of step, particularly when the goalposts have moved or formal documentation is misplaced by the next review cycle.

What is the answer then to ensure we maintain the important focus on personal and career development without using archaic approaches that no longer fit the modern workplace?  

Short-term objectives linked to current challenges and goals, team alignment and collaboration on their objectives, regular 1-2-1s – not in place to review to-do lists, but to coach individuals.

All this helps provide a deeper, real-time understanding of an individual’s achievements, challenges and stressors, plus an open dialogue on how you can best support them as business leaders and line managers.

Moving in the right direction

The irony is not lost on me that as I write this, we are in the midst of our own annual review process. We have not cut ties with it altogether, at least not yet.

Old systems rarely disappear overnight, and pretending otherwise would be disingenuous. However, we are making continual shifts in the process.

We moved our check-in process to quarterly some years ago, and this year we are working to ensure every individual has a set of 90-day sprints that are widely shared and directly linked to company and individual team goals.

We have introduced preliminary team meetings to establish collective goals prior to individual appraisals. We also continue to build on our coaching culture to ensure an ongoing dialogue and accountability that celebrate success and reflect on when things don’t go to plan.

 So, perhaps this is not a eulogy after all but a transition. The annual review may still be in the room, but it no longer runs the meeting. And in an ever-changing world of collaborative work, shared accountability and continuous learning, that feels like progress.

Lisa Morgan is managing director at Generation Media. Read her new monthly column for The Media Leader on the first Thursday of each month.