The annual review is evolving into year-round coaching and skills-based feedback – but it’s not disappearing
The annual performance review isn’t disappearing from Canadian workplaces – but human resources (HR) leaders agree that it can no longer stand alone as the principal measure of how employees are doing. Instead, the future of performance management will feature a shift toward continuous, skills-based feedback that runs throughout the year, with the formal review serving as a checkpoint rather than the main event.
“I think there’s still going to be some element of it,” says Céline Maasland, Head of People and Culture at RVezy in Ottawa, of the traditional annual review. “I don't know that they're necessarily going to go away, if nothing else for the sake of documentation, but I think certainly there should be far less emphasis placed on them.”
Maasland says her organization pairs ongoing discussions throughout the year with a more formal end-of-year evaluation tied to compensation and promotion decisions.
Why the formal review still has a place
Shawn Gibson, Chief Human Resources Officer at Infotech Research Group in London, Ont., agrees with keeping a structured review in the mix. “I really think performance reviews have a place that provides structure and alignment, drives accountability and decision making, and enables development and documentation,” Gibson says. “It's hard to tie ongoing feedback or skills-based coaching to compensation merit decisions.”
Gibson describes the year-end conversation as something that should never contain surprises. “One adage that always rings true to me is that a performance appraisal should never be new information,” he says. “It really should be a summary of the information or of everything that's been been covered throughout the year.” That same principle underpins a broader move toward more frequent check-ins enabled by technology.
Katie Thibeault, HR Manager at Cognition+ in London, Ont., says her organization treats the annual review as one part of a larger process rather than the whole of it. “I don't think it's the entire process and if that’s what you're relying on alone, you're definitely missing a lot of powerful opportunities to connect with your team.” Cognition+ pairs formal reviews with monthly one-on-ones, where goals and career development are discussed openly with managers, according to Thibeault.
Thibeault’s point is underscored by McLean and Company’s 2026 Guide to Establishing Performance Criteria, which found that employees who understand their job expectations are 8.6 times more likely to be engaged in their work, while HR team members who believe their performance management process is strong are nearly five times more likely to report having an effective employee engagement strategy.
Moving managers from critics to coaches
Another trend in the evolution of performance management is a parallel shift in how managers themselves are being trained – away from delivering verdicts on past performance and toward coaching employees forward, according to Gibson. He says his organization has built a three-part manager training series specifically to reinforce this coaching mindset, deliberately scheduled during the company's busiest period. “We feel that if you're training right at the busiest time, it shows how committed we are as an organization to our managers at really excelling [at coaching],” he says.
Thibeault says the goal with her organization is to make coaching part of everyday leadership rather than something reserved for review season. “We really look for our leaders to invest in their employees’ development and understand their career growth and objectives,” she says. “We want them to help create opportunities for the folks on their team to advance and get them on those projects that they're interested in.”
As managers shift their approach, HR can facilitate them helping each other become better coaches, according to Maasland. “They can to each other about what they've seen work well or what maybe didn't work quite as well as they hoped, so that they can share some of those best practices,” she says. “I myself work very closely with managers on coaching conversations, and we'll talk about different perspectives and how to approach the conversation.”
Skills, AI, and measuring performance
As organizations place more weight on skills over fixed job descriptions, Maasland links that shift directly to the growing presence of artificial intelligence (AI) in daily work. “Most roles still have a human element that's needed,” Maasland says. “It's looking at, ‘How can I make sure that you, the human, can develop those skills that make you really valuable.’”
Similarly, Gibson says Infotech is moving to define proficiency levels for specific skills and tie progression and pay to that growth, rather than to a checklist of tasks.
On whether AI tools should factor into how performance itself is measured, all the HR leaders are cautious. "I don't think performance should be measured based on how frequently they use AI tools, but more about how effective their use is,” says Thibeault. “And that will come out as you measure their outcomes and their deliverables.”
For Thibeault, AI has really helped reduce administrative work, but human judgment is necessary for the information it’s providing. “We've seen a lot of great success with being able to implement AI tools in our day-to-day work but not measuring how often they're using it,” she says. “We’re encouraging folks to use it, getting folks comfortable with it, and then seeing the success in the work outcomes.”
Bridging the remote work gap
Although many organizations are bringing employees back to the office, hybrid and remote work remains a significant consideration, particularly with performance management. As organizations operate across in-office, hybrid, and remote models, visibility – or the lack of it – must be accounted for around feedback, says Gibson. “A lot of times organizations will just say, ‘You're a manager, go figure it out,’” he says. “But first and foremost, set expectations for managers around feedback interactions when working remote or in a hybrid environment, and setting specific cadences or touch points that managers need to have.”
Thibeault points to over-communication as the antidote for a feedback gap with remote or hybrid employees: “If you think you've shared something one too many times in too many channels, do it again, do it one more time,” she says.
For Maasland, keeping the coaching lines open is essential to effective employee development and an effective performance management program. “The more you speak to someone, the more they start to understand your intentions and your style of delivery, and they feel more comfortable and they'll know to expect feedback,” she says. “Having a relationship based on trust helps feedback go much further and helps any performance conversation go much further.”
