The Annual Review Is Useless. Here’s How to Kill It

By now, it’s hard to imagine there’s an HR professional who doesn’t know the annual performance review is under attack. Some of the largest companies — and plenty of others — have abandoned them in favor of regular and timely feedback.

But three years ago, when David Needham, a self-described “Organizational Punk Rocker & Talent Improvement Catalyst,” called the reviews “absolute bullshit” and said they are “completely useless. They do absolutely nothing for performance,” his DisruptHR Denver audience cheered.

They were no doubt aware that momentum was building to do away with traditional reviews. Needham, though, summarized the case against them and presented the alternatives in a 5 minute talk so pointed and clear that it resonates today:

  • There’s an amazingly sharp disconnect between how managers see the goals they set and how employees actually understand them;
  • The cost of doing the annual review for even a small company runs into the six figures;
  • There’s no evidence the reviews actually motivate workers.

“Looking in the rearview mirror isn’t the way to drive forward,” says Needham. Instead, regular, two-way feedback between managers and their team is more effective and produces better results, he said, briefly outlining how a company can make the change.

Hear what he had to say in this 5 minute video.

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