Appraisals: Myth, mess or must-have?Why performance appraisals matter more than ever (and how to fix them for 2026)

Performance appraisals remain one of the most misunderstood and often disliked processes in the workplace. Despite good intentions, many organisations still rely on annual reviews that feel stressful, subjective, and disconnected from real performance. 

As businesses head into 2026, this approach is becoming both ineffective and risky. And that’s the topic up for debate in the latest episode in our We can work it out podcast series, with John Hayes and Amanda Rajkumar. 

Why do appraisals cause anxiety?

Appraisals often combine judgement, pay decisions, and career progression into a single annual event. This creates high emotional stakes and encourages defensiveness rather than learning. When feedback is delayed for months, it loses credibility and can feel unfair or surprising, especially where employees have had little guidance during the year.

Spoiler: Annual reviews are not feedback

A once-a-year appraisal is closer to a verdict than a development conversation. Research consistently shows that meaningful, regular feedback leads to higher engagement and better performance. Organisations that rely solely on year-end reviews miss opportunities to course-correct early and allow frustration to build on both sides.

Continuous feedback is the key to reducing bias

One of the biggest flaws in annual appraisals is recency bias, where recent events outweigh performance across the full year. Regular check-ins, mid-year reviews, and documented conversations create a more accurate picture of performance and reduce the risk of inconsistent or unfair assessments.

Simpler systems work better

Overly complex appraisal processes often discourage managers from engaging properly. Shorter, clearer frameworks (ideally aligned to company values and measurable outcomes) are more likely to be used consistently. Effective appraisals focus on what good performance looks like in practice, not lengthy forms or abstract scoring.

360 feedback should support development

Peer feedback can be powerful when used carefully. Smaller reviewer groups, anonymity, and a focus on development rather than pay decisions help make feedback constructive. The real value comes when feedback prompts follow-up conversations, not when it sits in a report that is never discussed.

Manager capability is the biggest factor

Even the best appraisal framework fails if managers lack confidence or skill in giving feedback. Unclear, vague, or overly cautious conversations often leave employees confused about where they stand. Investment in manager training is one of the strongest predictors of successful performance management.

Appraisals now carry legal weight

With upcoming changes to UK employment law in 2026, documented performance conversations are no longer optional. Employers will need clear, consistent evidence of performance issues from early in the employment relationship. Poorly carried out or inflated appraisals can significantly increase legal and financial risk in disputes around dismissal, bonuses, and promotion.

The shift from judgement to development

The most effective appraisal systems balance looking back with looking forward. They assess performance against objectives while also creating action plans, setting expectations, and supporting future growth. When done well, appraisals become a tool for motivation, retention, and risk management – not a dreaded annual event.

Final thoughts on appraisals 

Performance appraisals are not obsolete, but they do need to evolve. Simpler processes, continuous feedback, better-trained managers, and forward-looking conversations will define effective performance management in 2026 and beyond.