Ask business leaders whether formal performance reviews help the organization, and most say yes. Ask whether eliminating them would hurt, and most say no.
Both answers come from the same people. In Betterworks’ 2026 Performance Management Survey, 76.9% of business leaders said formal reviews contribute positively to organizational priorities. Yet 67.0% said eliminating them would either improve outcomes (40.1%) or make no difference (26.9%).
So are leaders confused? We don’t think so. They still believe in evaluating performance and holding people accountable. What they’re questioning is whether the traditional review process helps them do it.
That’s the review paradox. It points to a bigger question than whether reviews should stay or go: why are so many organizations still building performance management around a single event?
What leaders value isn’t the review itself
The survey offers a clue. 70.6% of business leaders said their own role as a manager would be unchanged or better without formal reviews. These are the people expected to run the process, and many don’t see it as essential to doing their job.
People value what a review is supposed to represent:
Accountability
A shared standard of performance
Honest feedback
Documented performance
Informed talent decisions
None of those has to originate in a review cycle. A review shouldn’t be the first time a manager discusses progress, surfaces a problem, or recognizes a contribution. When it is, the review isn’t evaluating performance. It’s delivering old news.
This skepticism isn’t new. In a 2015 Harvard Business Review article, Deloitte reported that its forms, meetings, and ratings consumed close to 2 million hours a year. It also cited a survey in which 58% of executives said their approach drove neither engagement nor high performance. Gallup has argued for shifting from performance management as an event to performance development as an ongoing practice.
What’s different now is that business leaders are telling us the same thing.
The business moves continuously. Performance management often doesn’t.
Here’s where the review starts to strain.
69.1% of business leaders still describe their formal process as annual or semiannual reviews, with or without periodic check-ins. Only 28.0% describe an ongoing model.
Meanwhile, 59.6% say business priorities change quarterly, monthly, or continuously. Only 36.8% say goals update that fast.
Ask a periodic evaluation to do the work of continuous alignment, feedback, and coaching, and it will fall short. It was never built for that job. Managers end up reconstructing a year of work from memory, and employees hear feedback months after it could have helped.
Business leaders see the friction too. When we asked what gets in the way, they pointed to administrative burden on managers (26.9%), managers lacking time (25.8%), and goals that change too quickly (24.7%). Those are process-design problems, not signs that managers don’t care.
What a review is still good for
Reviews still do real work. Done well, they provide documentation, fairness, and accountability, and they give leaders a moment to calibrate decisions across teams. That includes preserving transparent standards and a clear path for employees to raise concerns.
But reviews do that work best as synthesis points. When feedback, progress, and recognition have been captured throughout the year, a review can summarize the evidence and support consequential decisions. When they haven’t, the review becomes a reconstruction exercise, and the people being evaluated can tell.
From centerpiece to checkpoint
The shift isn’t from reviews to no reviews. It’s about where the review sits. In a stronger model, it’s one meaningful checkpoint inside a continuous system:
Goals evolve as business priorities change
Managers coach throughout the year
Feedback and performance evidence build up as work happens
Formal reviews synthesize that evidence and support better decisions
More check-ins alone won’t get you there. More activity just adds more administration. What matters is whether performance information is useful, connected to business priorities, and actionable all year.
That’s how Betterworks Performance Management works. Goals connect company priorities to team and individual work. Feedback and 1:1 Meetings capture evidence in the flow of work. At review time, Conversations and Calibration draw on that evidence instead of memory, and AI-assisted summaries help managers work from a fuller picture while keeping judgment calls with people. Talent decisions become more consistent and easier to defend. (For more, see what makes an AI-assisted performance decision defensible.)
The point of performance management isn’t a closed review cycle. It’s helping the organization execute its priorities and make better people decisions.
So, should companies eliminate annual performance reviews?
Our research doesn’t make that case, and it shouldn’t be read that way. The survey measured leaders’ perceptions of a hypothetical. It didn’t track what happened at organizations that actually eliminated reviews.
What the data does show is narrower and more useful. Leaders want accountability, alignment, feedback, and better decisions. They’re no longer convinced a once- or twice-a-year event is the best way to get them. The question to ask isn’t what replaces the review. It’s what has to be true all year so the review is worth having.
So what should replace annual performance reviews? In most cases, nothing replaces them outright. What changes is the system around them: goals that update as priorities shift, coaching that happens in context, and evidence that accumulates as work happens, so the review has something solid to draw on.
What is your review process actually accomplishing?
Before you redesign anything, test what you have:
What would managers and employees lose if the formal review disappeared?
Which activities genuinely improve performance, and which exist mainly to complete a process?
Are reviews documenting performance that’s already been discussed, or introducing feedback months too late?
Does the process give leaders the evidence to make consistent, defensible decisions?
You don’t need a full rebuild to act on the answers. Audit each review step for the decision or outcome it enables. Simplify what doesn’t earn its keep. Pilot a lighter approach in one business unit, then scale only what works. The goal isn’t fewer reviews for their own sake. It’s more useful performance management throughout the year.
See what 934 HR and business leaders say is working, what’s breaking down, and what needs to change in the 2026 Performance Management Survey.
Read the full survey
