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Why You Should Dump The Annual Review


Most people would rather endure root canal surgery than participate in one of their company’s annual performance reviews.  Sadly, the annual review does little to help the employee grow because the die has often been cast by the time the review rolls around. 

So why do so many companies stick to this tired formula that frequently breeds a trifecta of anxiety, cynicism, and fear? 

Bestselling author and business thought leader Peter Block describes the annual performance review as an expression of patriarchy: “The boss holds the power card and you better listen up or else.” Block believes the review is designed to keep the employee in his place and to shore up power and authority and hierarchy.

Let me suggest a more effective approach. 

Smart leaders jettison the formal performance review and carve out time for frequent coaching conversations that both provide feedback to their team members and solicit feedback from them – a practice that 33Across CEO Eric Wheeler calls “always conversations.”  


Wheeler makes it a practice to initiate informal conversations on a daily basis. That way there are fewer communication gaps, his direct reports always know where they stand, and there’s greater alignment of priorities.

Maureen McGuire, the former CMO of Bloomberg, who participated in a research study I co-authored on mentoring, once told me: “Coaching doesn’t have to be formal or time-demanding -- it can be a quick cup of coffee in an airport lounge, or a drive-by conversation in the hallway.”

Think of it this way: you’d never wait 12 months to provide P+L data to one of your key business leaders, so why would you wait that long to talk to your people about their leadership effectiveness and career development? No one likes to be on the receiving end of a “gotcha.”

Timely and specific positive performance feedback increases the likelihood of that behavior being repeated. Similarly, timely constructive feedback increases the likelihood that non-reproductive or problematic behavior will not be continued.

8 Guidelines for Effective “Always Conversations”


1.    Make them a weekly or daily practice

2.    Keep them relaxed + informal; meet in your employee’s office or in a neutral space

3.    Be honest

4.    Listen more than you speak

5.    Start positive; describe behaviors and accomplishments that you like, respect, or appreciate

6.    Ask open-ended questions. For example, ask your direct reports:

  • “Describe a recent win you’re proud of – what do you attribute your/our success to?”
  • “Looking forward, where do you want to be in the next 12 – 18 months?”
  • “What do you like most about your role?”
  • “What keeps you up at night and how can I support your efforts?”

7.    At the end of the conversation, ask your employee to recap their takeaways from the conversation and agree on topics to be placed in a parking lot for follow-up discussion

8.    Thank them for their time and for sharing their thoughts with you


The good news is that when you replace formal annual performance reviews with regular “always conversations” you, your direct reports, and your company will reap big benefits from real-time feedback, greater alignment, and increased engagement.


Andy Satter
Founder | CEO
Andrew Satter & Associates, Inc.
(845) 256-0995 (direct)  

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