It’s that time of the year again—the annual performance review. And if you’ve ever been part of one, you might relate to going out of your way to make sure you’re in everyone’s good books right around review time.
Annual 360 surveys are one of the most widely-used methods of performance reviews. The idea behind such a survey is that gathering feedback on an individual from a range of their peers gives the most accurate interpretation of the employee’s performance. And it’s only one of several performance review systems around the world that aim to deliver the most precise review of an individual possible.
However, despite the long history of performance reviews, most companies still believe that their performance management system fails to meet expectations. A 2019 study by Mercer, an asset management and research firm, revealed that only 2% of companies around the world believe their performance management process delivers exceptional value.
Needless to say, there are some factors that sabotage these reviews the world over. What are these specific pain points that make performance reviews so arduous and challenging?
Common Challenges That Come With Performance Reviews
Performance reviews come with a series of challenges that make them ever so complex to navigate. These challenges can primarily be summarized under the following three buckets:
- The Emotional Factor: Research shows that giving feedback can be as anxiety-inducing as receiving it. This is most likely the reason why what should be honest, constructive criticism is replaced by vain, polite statements. Emotions also give way to personal biases and consequently, unfair evaluations.
- The Administrative Burden: HR is responsible for executing the task of performance management. And conducting a performance evaluation of various individuals from various teams that are to be evaluated under different variables is no walk in the park.
- Inadequate Results: The end result is often an inaccurate, ineffectual rating that serves neither any productive purpose nor provides employees with any actionable feedback to work on. So much effort goes into what is ultimately, severely underwhelming results.

Once in a Blue-Moon 360s Just Don’t Cut it Anymore
Ballads of the many benefits of 360s have spread far and wide in the corporate world. While there is undeniably some truth to the tales, 360 surveys are largely ineffective in assessing the performance of employees in an organization. Here’s why:
- They are time-consuming. It takes time to elicit feedback from multiple sources to review a single individual and even more so for the team leader to analyze the insights from all the sources and compile them into a deducible format for the reviewee.
- They are notoriously subject to personal biases. 360 feedback is often plagued by unfair statements or poor judgements as a result of these biases. In addition, the general focus on weaknesses over strengths in such surveys creates feelings of resentment and distrust among team members.
- They often arrive too late. The annual 360 feedback often comes too late for the reviewee and any opportunity to work on the feedback received from such a survey has most likely long passed.
- They are subject to recency bias. There’s a high chance the feedback from an annual survey might focus on a recent period of great performance while failing to address a preceding period of poor performance, and vice versa. Heavy reliance on the memory of individual reviewers negatively affects the accuracy of feedback in these point-in-time surveys.
The Harvard Business Review denounced 360 surveys for its fatal flaw—bad data that relies on the reviewer’s personal standpoints as opposed to the individual’s actual progress. Reviewers in a 360 survey most often assess individuals on the basis of how they themselves compare to the reviewee. This is in contrast to the purpose of an annual performance review—to evaluate an individual’s unique personal growth and performance. In a nutshell, a 360 survey compares the individual against other employees whereas what really matters is how much the individual has developed over time—which it fails to evaluate.
So how about we take a 180 and break performance evaluation down into a fairer, more transparent system?
Studies Show That Real-Time Feedback Makes for a Distinctly Better Performance Management System
Over the years, several well-known organizations (think Adobe, Dell, IDM, etc.) acknowledged the inadequacy of the annual performance review system. These companies then chose to adapt and move on to a better, more transparent model—one of real-time performance management—and benefitted from it. According to Deloitte, 90% of companies that revamped their performance management model—usually to one featuring more regular feedback—saw improved employee engagement.
Let’s look at why a continuous and real-time feedback system significantly outperforms a single annual performance review:
1. Real-time and continuous feedback is recent in nature. Hence, team leaders do not have to rely on memory for events well in the past. This makes such feedback accurate and more reliable. This ensures that recency bias is completely out of the picture.
2. Such feedback is on-time and immediately relevant. Employees are provided with real-time insights that are relevant to their current projects. In the annual 360-survey, this feedback would have arrived too late and the feedback would have been pointless. Thus, employee feedback is best provided as and when necessary, not once annually.
3. It provides concrete actionable takeaways. Continuous feedback is feedback that individuals can actively work on, thanks to its clear and concrete takeaways. This is contrary to the annual 360 feedback, which ends up serving merely as a rating or measurement of performance without any actionable takeaway.
4. It adds value to annual performance reviews. Real-time feedback means constant and continuous insights for employees regarding their performance. Such a regular and timely feedback system makes way for a more streamlined and effective annual performance review.

5. It ensures more collaboration. Real-time feedback means more interaction between team members and team leaders—this forges trust and stronger relationships among employees as opposed to the tension and resentments that 360 surveys bring about.
6. It does not burden HR managers with administrative complexities. It's simpler and relatively easier to execute as opposed to org-wide annual 360 surveys.
Continuous Feedback Is the Key to Streamlining Your Annual Performance Review
360 surveys are widely popular because of the variety of sources they borrow from to assess an individual. However, there is immense scope for good data to be plagued with inaccurate and biased data from unnecessarily large panels of reviewers, bringing down its reliability.
Establishing a continuous, yet more reliable, real-time feedback system in place is hands-down the best way to combat this flaw of the 360 survey. A continuous feedback system works to provide a steady stream of timely insights to individuals, while also working towards moulding the annual performance review to its most accurate and transparent form.