It’s practically axiomatic at this point that the annual performance review is broken. According to a new report by the Arbinger Institute, a full 30 percent of respondents said that such reviews are “not useful or a complete waste of time.” 

The intensifying disdain isn’t surprising. As more workers post-pandemic look for ways to better integrate their work and personal lives, they’re seeking more meaningful ways to feel engaged with their organizations—and a tick-the-box exercise largely built around compensation decisions isn’t going to do that. A recent article by IMD Business School Senior Advisor Lars Haggstrom notes that this frustration is why companies like Microsoft are dispensing with those reviews.

If you don’t know what your overall organization goals are, how are your people supposed to know theirs?

Instead, Haggstrom writes, Microsoft is focusing on what it calls “Connects—check-ins between employees and managers designed to delve into performance, career development, and alignment with company objectives.” More regular check-ins are a common approach to getting away from the dreaded annual review, of course. But don’t discount that point about “alignment with company objectives.” If you don’t know what your overall organization goals are, how are your people supposed to know theirs?

The Arbinger Institute report puts a spotlight on that particular point. Among the people it surveyed who said they do value the annual performance review, 72 percent of those say they “use the time to discuss how their efforts contribute to company goals and initiatives.” 

Framing performance conversations around goals has the obvious benefit of helping people know what they ought to be working toward. But being goal-oriented also gives workers the freedom to help design what achieving those goals looks like. In a piece at Fast Company, International Coaching Federation CEO Magdalena Nowicka Mook advocates for a more iterative check-in system that empowers workers. She writes: “Rather than placing the responsibility on leadership to provide a plan for improvement, it places expectations equally on the individual to establish their own pathway to success through a culture driven by learning and development.”

So what should you be talking about during those check-ins? According to the Arbinger report, not overall job performance or compensation—matters that are better handled by those annual reviews. More often it’s “areas for improvement” (28 percent), “collaboration with others” (37 percent), and “personal development and well-being” (23 percent). In other words, the day-to-day things that keep people on track—or derail things if months go by and they’re not addressed. 

To better stress the idea that employees are empowered to manage their team relationships and how they meet their goals, the Arbinger report recommends that they manage the check-ins as well. “Employees [should] prepare for, schedule, and conduct the check-in meeting,” the report suggests. “Employees [should] rate themselves and their impact on their peers.”

Any process that asks a person to justify their contributions to an organization is going to make them feel at least a little defensive—it’s part of the reason why lots of workers dislike taking part in them and why leaders dislike administering them. Reframing it as an employee-led exercise won’t entirely remove that sting. But it can validate the point every leader wants to make: That your people are valuable, and that their understanding of the organization’s goals contribute to its success.

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