Is Continuous Feedback Better Than Annual Performance Reviews?

Creating a culture of continuous feedback is often recommended as a better alternative to inspiring employees than the traditional annual performance review, but it also faces implementation challenges.

The primary knock against the annual performance review is they’re not timely.

Often, goals set at the start of the year are no longer relevant, and without hearing feedback regularly, employees aren’t given the chance to self-correct.

“If you’ve waited all year and your annual review is that you’re a terrible performer, shame on company management for letting you go all year and not know it,” Dan Kaplan, senior CHRO client partner for Korn Ferry, the executive search firm, told Fortune. “That essentially is an indictment of leadership, that you have not communicated to a poor performer other than once a year. And for sure, the trust goes down.”

In comparison, a problem with “real time feedback,” according to Jason Evanish, CEO at Get Lighthouse, a provider of management training programs, is that emotions often arrive in the dynamics of the workplace. He wrote in a blog entry, “Think about the last time you were upset, stressed, tired, or up late working. Was that the right time to send feedback to someone? Whether they ‘really needed to hear it’ or not, you were probably not at your most constructive and effective in your feedback in that moment.”

Continuous feedback also suffers from recency bias and can stifle creativity, as risk-taking often declines amid fears that new approaches will be quickly criticized, according to Evanish.

Evanish recommends one-on-one meetings on a monthly or weekly basis. He wrote, “Once a year is clearly not often enough for feedback in our information laden era. Meanwhile, real time feedback is overdoing it like so many of our bad mobile habits. The 1 on 1 provides the ‘just right’ balance to help managers and their teams more effectively discuss feedback.”

A recent Gallup poll of nearly 19,000 U.S. employees found that employees going through quarterly progress checks are 90% more likely to be engaged and 2.1 times as likely to feel the process is fair and transparent.

However, the survey also found that only 22% of employees strongly agree that their performance review process is fair and transparent, with the review often largely based on their manager’s subjective judgment. Gallup recommends incorporating team goals, customer metrics, and other objective measures, as well as development goals, as part of employee evaluations.

Gallup’s survey also found that employees actively involved in their goal setting are two times as likely to have clear expectations to help anchor their pursuit of goals.

A recent Wall Street Journal article noted that the shift to more routine employee check-ins versus annual or bi-annual reviews can feel like a “fire hose of feedback” for employees.

The article indicated that companies are training employees on how to give feedback to their peers and managers while also encouraging employees to have a healthy skepticism when being critiqued. David Rogier, co-founder and CEO of MasterClass, the online education platform, told the WSJ, “Just because somebody gives it to you doesn’t mean that you have to take that as the truth or being right.”