Companies That Got Rid of Performance Reviews

When I built my own team, I made one quiet decision that surprised people: no annual performance reviews. I give feedback constantly, in the moment, where it can still change something. The once-a-year verdict never earned a place in how we work.

People react to that as if I removed a load-bearing wall. The annual review feels structural, like something work cannot function without. Then you look at where it came from, and you find a tool built to rank army officers in 1917, handed down through corporate America, and now being dismantled by the very companies that made it gospel.

The annual performance review was built in 1917 to sort large numbers of interchangeable army officers, not to help anyone grow. Adobe, Microsoft, and GE have all dismantled their versions. The annual grade moves your sense of worth from inside you to a manager's spreadsheet, and you can take it back.

What the performance review was built to do

The intellectual root is Frederick Winslow Taylor, whose 1911 book on scientific management replaced a worker's own judgment with standards set and measured from above. Output became a number someone else assigned. That was the soil the review grew in.

The first real instrument came out of war. After the United States entered World War I in 1917, the psychologist Walter Dill Scott adapted comparative rating scales to rank and promote army officers at speed. The military needed to sort huge numbers of interchangeable men quickly, and Scott's scales did exactly that. Growing any individual officer fell outside the job. The method worked well enough that industry imported it through the 1920s and 1930s, and the annual grade settled into corporate life.

How the annual grade became gospel

By the 1950s, formal appraisal had become standard practice across large companies. The version most of us recognize arrived later, when Jack Welch popularized forced ranking at GE. His vitality curve sorted employees every year into a 20-70-10 distribution, with the bottom 10% counseled out or cut, by design, even on a team where everyone performed.

That model spread because it felt rigorous and looked objective. A curve produces a number, and a number feels like truth. The catch is built into the math: when a fixed share has to land at the bottom, your standing depends on your position in a ranking you cannot see, on a curve you never agreed to.

The companies that invented it are quitting it

Here is the part that should change the conversation. The companies most identified with the annual review have been dismantling it for over a decade.

Adobe retired its annual review in 2012 and replaced it with lighter, more frequent check-ins, after estimating the old process ate tens of thousands of manager-hours a year. Microsoft killed stack ranking in 2013, and its HR chief told staff there would be no more curve. Then GE, the company that turned forced ranking into corporate religion under Welch, ended its annual ratings and moved its workforce to a continuous-feedback approach by 2016.

Companies invented the ritual, and the companies that invented it are dropping it. That tells you what it was all along: a tool that solved a problem of its era and stopped working in ours.

Why the annual grade costs you

The deeper cost lands on the person being rated. An annual external grade relocates your sense of worth from inside you to a manager's spreadsheet. A full year of contribution compresses into a single label, handed down once, and the ritual trains people to wait for the verdict and to perform for the rater rather than for the work itself.

The CTOs I coach carry this in their bodies every review season. Capable people who have shipped all year feel their shoulders climb toward their ears for weeks before a meeting that tells them what they already know. The dread comes from the handoff itself: giving one person the authority to summarize a year of you in a sentence, on a schedule someone else chose.

The pattern is old. Robert Owen, the same mill owner who gave the labor movement the eight-hour slogan, ran an earlier version at his New Lanark mills around the 1810s. His "silent monitor" was a four-sided block of wood at each worker's station, colored to broadcast the previous day's conduct and logged in a permanent book of character. Two centuries later the block became a form, and the form became an app, and the function held: someone else records your worth, and you learn to wait for the reading.

How to replace the verdict

You may not control whether your company runs reviews. You can refuse to outsource your sense of worth to one. Here is what I do as a leader, and what I coach individuals to do.

1. Give feedback in real time. If you lead people, say the useful thing the week it happens, when it can still change the work. An annual summary of things you noticed in March helps no one in December.
2. Separate development from ranking. Talk about growth in one conversation and compensation in another. Fused together, the growth conversation becomes a negotiation and the honesty drains out.
3. Keep your own scoreboard. Write down what you set out to do this quarter and what you actually delivered. When you hold your own record, a manager's grade becomes one data point instead of the verdict.
4. Ask for the read you need. Request specific feedback on the work that matters to you, on your timeline. The person who asks good questions all year never has to wait for a form.

The annual review was a wartime sorting tool that taught us to wait once a year to find out if we were enough. The companies that built it are walking away, and you can stop waiting too. Your worth was never theirs to grade on a curve.

When was the last time you let an annual verdict tell you something your own work already knew?