Annual reviews are dreaded and hated by many, even when they are conducted by well-intentioned and kind teammates. Here’s what is wrong with them.

They are awful mechanisms for feedback: Up to 12 months is a very long time to wait before passing along a piece of constructive criticism, or for giving kudos when a colleague does something awesome. Write me up for anything I did more than 5 weeks ago and I can hardly confirm nor deny, which hinders my constructive response.

Witch-hunts for weaknesses: Reviews tend to devolve into witch-hunts for weaknesses. This can happen even with the most supportive of work environments. Maybe your closest friends at the office write great positive feedback about your performance over the last 12 months (again, lol), plus a single “thing to improve.” Guess which details your manager will clue into?

I know some wizard-level engineers. Even they have weaknesses, but do you think that nitpicking on their perceived weaknesses will necessarily make them better at what they do? Honestly not. If anything, they should be encouraged to become even more of who they are. Great work is often not done by well-rounded people with few weaknesses but by brilliant weirdos with (hopefully adorable) weaknesses. In the language of economics, this is called developing your competitive advantage. In terms of Maslow’s hierarchy, this is called self-actualization.

Subjectivity of reviews introduce compensation disparity: In Moneyball, the Oakland A’s used objective metrics to combat the subjectivity of individual scouts. Even with the best talent scouts in the world, there is no getting around the fact that it requires LOTS of observation to even notice whether a player is batting .200 or .300 (which in baseball is a big difference). In many professions, there is no easy, statistical way to measure our effectiveness, and our reviews are often limited to anecdotal and subjective observations. When such anecdotes are used to set raises and compensation, that really creates problems.

The ones who receive raises are often the best at communicating their accomplishments, attracting the attention of management, and asking for raises. I would bet money that this dynamic is at least partly responsible for the wage disparity between men and women in many industries including technology.


What I would like is to find a better solution to these age-old management problems. It begins with fostering healthy feedback between teammates — those are the table stakes. Please do not wait up to 12 months to show appreciation or suggest a change in behavior.

Next, mitigate the role of subjectivity in compensation. The legal profession offers a practical model: 1st-years make X and 4th-years make Y, no questions asked. Meritocracy is enforced by the partner track, a long-term evaluation for leadership — you know when you’re on it, and you know when you’re not.

To apply this in the tech industry, for example, set salaries based on years of experience per role (competitive with the market, of course). A “staff engineer” marches up a compensation matrix every year until that employee receives a promotion. Call it a zero-salary band for each role-and-rank. This reduces the freedom to outbid competing offers on the basis of salary when trying to recruit a promising candidate. But the company can strongly signal that it values its employees and that promotions come to those who display undeniable long-term leadership, such as authoring tools that become widely adopted, hiring tons of great people, or building out a thriving business group.

Finally, personalize career goals to the employee. Do not assume that all employees have similar goals. For some, success could mean delivering well-attended conference talks. Others could have aspirations to start companies in the future and want to be staffed on projects that involve fast iteration. Managers who understand and support their employees’ career goals will have better luck retaining their teams and keeping them motivated.

Add to that a communicative work environment without antiquated management rituals such as status quo-style reviews. I would want to work at such a company.