Continuous Performance Reviews or Formal Appraisals

Would you rather continuously analyze the performance of your employees or consider yearly appraisals?

We always receive a mixed response on this. A certain set of HR managers believe formal or yearly appraisals are best because it saves them money and time. Another set would instead go for continuous reviews to keep the workflow steady and healthy.

A study says that 95% of managers are happy with the way their company executes yearly reviews. It only seems legit as the yearly reviews are unfair. Many employees leave the company before the year-end appraisals and rest are disappointed by the appraisal they receive. Further, one major reason employees and manager don’t like formal appraisals is because it simply neglects the achievements of the employees. No one is going to remember your work one year later.

Hence, in this article, we will figure out how continuous performance reviews are better than formal appraisals.

Continuous Performance Reviews

Continuous performance is a process in which performance management goes on throughout the year. This means that the managers can provide instant, real-time feedback for the team working on a project right after the completion. This feedback is sometimes implemented on a regular basis in between the project to improve employee performance.

Formal Appraisals

Formal appraisals happen at the end of each fiscal year. This means that the review process of the employees also takes place then. It is hard for managers to consider the performance of the whole year, which leads to biased feedback for employees.

Why Adopt Continuous Performance Measurement?

Now, consider a few things here:

If an employee performed badly on the latest project due to some reasons, there is a good chance of only the last performance being counted by the HR.

If the manager changed and an employee had an argument with him, this manager can offer biased review for the employee who could be effective in reality.

If one member of the team performed badly, chances are that the whole team would be judged based on this negative outcome. 

With continuous appraisals, it is extremely easy to eliminate all these appraisal and performance review issues. You would know if an employee has suddenly started performing badly. Knowing this would immediately give you the power to reach to the core problem.

A survey by Gallup revealed that if managers conduct regular one-on-one sessions, employees are likely to engage 3 times more. This clearly indicates that continuous reviews can instead encourage high performance in employees – ultimately leading to enhanced productivity.

One major advantage of continuous reviews is that you can figure out as immediately as possible. For instance, if your team is not able to adjust with a new manager, you can analyze that sooner than later. Further, you would know whether a new employee is performing well or not. This can save you a lot of resources wasted on the wrong employees.

Do You Still Need Yearly Reviews?

Although many organizations prefer conducting yearly reviews along with regular reviews, it seems unnecessary. It is simply not necessary to take a yearly review of what you already know. This can, in fact, end up complicating the process.

If you have reviewed your employees regularly year long, you don’t need to process the same all over again in the year-end. Instead, the organization can compile this year-long review and find the optimal performance of the employees.

Here, you can find patterns in the performance based on various factors, which will help you enhance the performance of the employees. For instance, if a designer has shown great performance in a certain type of projects, you can utilize this talent in a specific field. This would improve the productivity of your employees and keep your clients happy as they would receive the best work and support.


You can achieve a massive improvement in productivity as well as the overall work structure with a continuous performance review. Human resources mean managing employees, which is a continuous process, not a yearly activity. You should constantly work to improve employee performance, help employees reach their personal goal and promote a healthy workplace environment.


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HR Connect In house Author

HR Connect In house Author

Our inhouse authors have expertise in several areas of HR and Payroll. Their content contributions have been published in leading blogs, websites and print publications.
HR Connect In house Author

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