Redesigning the Annual Performance Review

A dark-skinned person with short natural hair gestures while speaking to a medium-skinned person with long, straight brown hair who is out of focus and facing away from the camera at the right of the frame. The dark-skinned person is wearing an ivory blazer over a white button-down shirt with a silk scarf, a rose-gold wristwatch, orange- or pink-tinted clear acrylic eyeglasses, and light blue fingernail polish. In front of them, a laptop and a glass of water sit on a white or gray conference table surface. The other person is wearing a long-sleeved peach blouse with the sleeves rolled up. They are resting their arms on the table. In one hand, they are holding a piece of paper. Their chin rests in their other hand as they look at the person speaking. Behind the person speaking is a brick wall. The photo accompanies a blog post about redesigning annual performance review conversations, so the implication is that the two people featured are engaged in a performance appraisal.

Beyond the common awkwardness of performance review conversations, Gallup has found that work performance actually gets worse after the review for one-third of employees.1 So why do annual performance reviews tend to be so unsuccessful?

As Gallup’s writers observe, part of the issue might be that performance review conversations tend to be tied to conversations about promotions and pay raises, or even used as justification for firing.1 Not to mention, these annual conversations are sometimes the only opportunity for employees to receive feedback on their work all year. But there’s more to it than that.

Improving the effectiveness of the annual performance review requires us to understand its impact on the recipient’s ability to benefit from the feedback given during the review. There’s a neurobiological component to this and (of course) a personality component.

This blog will review some of the problems with traditional performance reviews and propose what an alternative model of performance review might look like. To do so, it will present neurobiological considerations for feedback discussions and highlight scales from Hogan’s core personality assessments: the Hogan Personality Inventory (HPI), Hogan Development Survey (HDS), and Motives, Values, Preferences Inventory (MVPI).

Problems with Performance Appraisals

How frequently a manager provides feedback contributes to performance review success, but so does the manager’s style of feedback delivery. Both are linked to manager personality. Managers who are approachable and skilled at energizing team members (e.g., those who score moderate to high on HPI Interpersonal Sensitivity, HDS Colorful, and MVPI Altruistic) may hesitate to provide candid feedback because of the risk that the recipient will be put off and become less engaged. Other managers might wish they could provide the annual review in an email (e.g., low Interpersonal Sensitivity, high HDS Reserved, high HDS Leisurely, low MVPI Affiliation).

The structure of the typical performance review is another issue. Annual performance reviews are usually given in one sitting, providing much more information than people can readily absorb or integrate into new ways of doing their jobs. Since strengths, problems, and plans are usually discussed in the same sitting, the brain’s hippocampus (which stores short-term memory awaiting integration into the brain) can become overwhelmed, unable to retain the full message.2 Because the person knows that potential problems will be discussed during the session, the amygdala (which acts as the brain’s siren) prompts the person to pay attention to only a limited amount of the feedback—usually the negative aspects.3 When the hippocampus is overloaded, especially if it includes information surprising to the recipient, frustration and anger are common reactions. This can happen even if the content of the feedback is not specifically negative.

In such scenarios, managers who strive to maintain harmony (e.g., high Interpersonal Sensitivity, high Altruistic) may take the employee’s irritation personally because they tend to be especially sensitive to rejection. Even those managers who are calm and even-tempered (e.g., high Adjustment, low Excitable) could become frustrated by what they might perceive as overreaction to constructive feedback.

A New Model of Performance Review

A few simple changes would make performance reviews more effective. For many people, two sleep cycles are required for important information to be sufficiently integrated into thoughts and behaviors. Because of this, annual reviews should be given in three segments of 20 to 25 minutes each and at intervals of at least two days. Each segment should focus on a particular area of feedback.

1. Inventory Strengths

The first 20- to 25-minute segment of the performance review should cover the person’s strengths, talents, and accomplishments. These strengths include all the reasons the person was hired, the skills the person has learned, and anything else they bring to the team. For the benefit of the individual and the team, the team member’s talents need to be incorporated into future plans.

Expect that even positive feedback won’t always be well received. Some team members are put off by having their talents described in detail (e.g., low Colorful, low MVPI Recognition). Even if they request constructive feedback, no changes in expectations are discussed in this segment. Inventorying talents is too important a topic to be clouded by other matters.

2. Review “Start Doing” and “Stop Doing” Feedback

The second segment, at least two sleep cycles later, covers the manager’s expectations for what the employee needs to start doing and stop doing. Both the “what” and the “how” are covered in this segment. This isn’t the time to discuss the manager’s philosophy on life, nor is it the time to overjustify the reasons for the start and stop feedback. This is because the team vision and its integration into the values of the organization should be made clear throughout the year.

Here’s an example of what this might look like in context: Two fairly successful salespeople were not providing specific and timely expense reports or clear activity logs. During this feedback segment, the manager described the processes for doing so, beginning immediately. This approach placed emphasis on “how” and “when.” The manager needed to be clear and persistent, and the simple reason was this: “I have a responsibility to my role, our investors, our customers, the other salespeople, and you. These are my expectations of you and of the others. These changes are part of accountability for all of us.” Although the salespeople had other more subtle growth areas, they first needed to get on track with responding to the manager’s expectations. The subtle matters could be discussed at another time.

3. Create a Plan

The third performance review segment, which occurs after at least two more sleep cycles, allows the recipient to respond to the first two segments. By this time, the team member has had time to review and integrate the feedback, and they are encouraged to express their thoughts. A plan is created for the person to leverage their strengths and respond to the manager’s expectations. Then the manager invites the individual to anticipate potential barriers to change and offers help that might be needed to execute the plan. The recipient is also invited to ask for the manager’s help in executing the plan.

Here’s an example of what this might look like in context: A new manager (high HPI Prudence) took a more structured approach to project management compared to her predecessor, but she was sensitive to the fact that too rigid a structure can inhibit flexibility and innovation (high HPI Inquisitive, moderate HDS Diligent). She had many start and stop expectations but was willing to take a measured approach to change. She decided to begin by increasing the level of structure in the next project. That way, the team could become accustomed to it and experience the benefits of a more deliberate process firsthand. The team made lots of requests for help from the manager while adjusting to the change, which she was happy to provide.

Substantial change is an emotional experience for many people (e.g., low Adjustment, high Excitable, high MVPI Tradition, high MVPI Security). Change is more easily experienced in a safe, listening atmosphere than when delivered impatiently by managers who are at risk of being unforgiving, indecisive, defensive, or judgmental (e.g., high HDS Skeptical, high HDS Cautious, high Diligent). When team members are able to review a new process and experience change gradually, change is easier to enact.

This blog post was written by James M. Fico, PhD, a psychologist and member of the Hogan Coaching Network.


1. Sutton, R., & Wigert, B. (2019, May 6). More Harm Than Good: The Truth About Performance Reviews. Gallup.

2. Havekes, R., & Abel, T. (2017). The Tired Hippocampus: The Molecular Impact of Sleep Deprivation on Hippocampal Function. Current Opinions in Neurobiology, 44, 13–19.

3. Sapolsky, R. M. (2004). Why Zebras Don’t Get Ulcers (3rd ed.). St. Martin’s Griffin.