Vol. 7, Issue 1, Part K (2025)

Traditional annual performance reviews have been the backbone of performance appraisal systems in organizations for decades. However, with workplaces evolving rapidly due to digital transformation, shifting workforce expectations, and the need for real-time agility, annual reviews are increasingly seen as outdated and ineffective. Data reveals that only 2 in 10 employees feel that their current performance review system motivates them to do exceptional work. Annual reviews often result in delayed feedback, disengaged employees, and missed growth opportunities. In contrast, continuous performance feedback models characterized by frequent check-ins, real-time communication, and dynamic goal-setting are being adopted by leading organizations such as Deloitte, Microsoft, and Adobe. These systems improve employee engagement, enhance productivity, and align performance with rapidly changing organizational goals. Furthermore, HR technology like HRMS systems, employee self-service platforms, and performance tracking software play a critical role in facilitating this shift. This paper analyzes the limitations of traditional reviews, explores how continuous feedback improves engagement and performance, identifies common challenges, and predicts future trends in performance management systems as of 2025.