In a Dec. 6, 2019, Telegraph article, McGuireWoods London office managing partner Daniel L. Peyton provided insight as to why most companies still do annual performance reviews, despite their unpopularity.
In an article discussing reasons companies should replace the decades-old annual performance review with more regular check-ins and real-time feedback throughout the year, Peyton said that doing away with annual reviews altogether risks losing valuable insights for those charged with managing teams.
Much of the article focused on the reasons why companies such as the big consulting firms have shifted to a new approach in the knowledge-based economy to meet organizational goals that change more rapidly than they did a generation or two ago.
However, Peyton pointed out that because annual performance reviews are often linked to pay increases, companies may have a difficult time scrapping them. Furthermore, annual performance reviews ensure that a company has a documented assessment of “shortcomings to justify performance management processes and also to justify the selection of individuals for advancement, promotion, bonus or training opportunities,” he said.