Rethinking Performance: Why the Annual Appraisal Is No Longer Enough

If performance matters every day, why do we only talk about it once or twice a year?

The traditional annual appraisal, once the centerpiece of performance management, has become increasingly misaligned with how people grow and how work really gets done. It’s backward-looking, overly formal, and often disconnected from real-time impact and motivation. The truth is, people don’t develop through ratings, they grow through conversations.

In my book, Getting to the Heart of Performance Management, I emphasize a simple but powerful shift: performance is not an event, it’s a relationship. When we treat performance as something we evaluate rather than something we build together, we lose the opportunity to truly engage our people.

Real performance conversations go beyond outcomes. They touch on three core dimensions: Work Performance (what gets delivered), Work Behaviour (how people show up and interact), and Career Development (what drives individuals forward). Focusing only on results misses the human side of performance, motivation, values, and growth potential.

We need to move from appraisal to ongoing dialogue, from judgment to joint problem-solving, and from top-down control to shared ownership. This shift doesn’t require more meetings; it requires more meaningful conversations, ones that are timely, human, and purposeful.

The Five Cs - Clarity, Challenge, Care, Communication, and Coaching, offer a helpful guide. When leaders engage with these qualities, they foster trust, surface insights, and create space for learning. These conversations don’t just improve performance, they build culture.

It’s time to move beyond managing performance as a tick-box exercise. Let’s start seeing it as a series of meaningful moments that build capability, confidence, and connection. Because when people feel seen, heard, and supported, they don’t just perform, they thrive.

What’s one small change your organisation can make to move beyond the annual review?

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For more insights on performance management conversations, check out our blogs.

Learn more about our Performance Management Conversations workshop and training for managers here.