They do different jobs, so the question is not which to pick. An annual cycle exists to produce a comparable, defensible record for pay and promotion decisions. Continuous feedback exists to correct course near the work, while it still matters. The constraint that decides your design is manager time, not philosophy.
It exists to produce a comparable record at a single point in time. Pay budgets, promotion decisions and succession discussions all need everybody assessed against the same criteria in the same window, so a person in one team can be weighed fairly against a person in another. It is also the record examined when a decision is challenged, which means it must be written, evidenced and dated. None of that is about motivating anybody. Criticising the annual review for being a poor coaching mechanism is criticising it for failing at a job it never had; the coaching has to come from somewhere else.
Correction while correction is still cheap. Feedback given close to the work is specific, both people remember the event, and behaviour can change before it hardens into a pattern. It also removes the worst feature of an annual-only model, which is somebody learning in a formal meeting about a problem their manager noticed months earlier and said nothing about. In practice it looks like regular one-to-ones with notes, feedback requested from colleagues who worked on a specific piece of work, and lightweight check-ins against current priorities. What it does not produce on its own is a comparable record at the moment somebody has to decide who gets promoted.
Recency bias, mainly: a manager writing in one sitting recalls the last few weeks more clearly than the first few months, so the assessment quietly becomes a review of the recent past. It concentrates a year of unsaid things into one meeting, which makes that meeting heavier than it needs to be. It lands its administrative weight on managers all at once. And where it runs purely as compliance, people fill in forms to unlock a pay decision already made, which is worse than not running it at all, because it consumes goodwill and produces a record that documents nothing real.
Manager time. A model that asks for frequent structured check-ins with every direct report is a recurring commitment competing with delivery, and when a quarter gets busy the check-in is what moves. Without a forcing function the cadence decays: monthly becomes occasional, occasional becomes nothing, and since there is no deadline nobody notices it stopped. The second failure is the record. When pay decisions arrive and no assessment exists, managers reconstruct one from memory anyway, which is the annual review with worse evidence. Span of control decides much of this: a manager with a handful of reports can sustain the rhythm, one with a large team cannot.
Lightweight, frequent conversations that leave a trace, feeding a much lighter periodic summary. The check-in is short, owned by the manager and the employee jointly, and its notes are visible to both. The periodic point pulls those notes together, adds a rating or a levelling judgement where pay decisions need one, and goes through calibration. Because the evidence already exists, the formal step shrinks from a writing exercise to a summarising one, which is what actually reduces the load rather than declaring the annual review abolished. Feedback requested from colleagues at the end of a project fits into the same trace and is far easier to collect while the work is recent.
Start from the decisions you have to make and the records those decisions require. If pay and promotion are settled in a single annual round, you need a comparable assessment at that point whatever you call it. Then look at manager capacity: span of control, how much of a manager's week already goes on managing, which the [reporting structure in your HR system](/hrms) will tell you faster than a survey, and whether managers have been trained to give feedback at all. Look at the workforce too, since distributed teams and shift-based operations make informal feedback less likely to happen by accident. A model that assumes daily proximity will not survive contact with a workforce that lacks it.
For an annual cycle: a defined window, assessment forms, a calibration view and an audit trail. For continuous: somewhere to record a one-to-one, request feedback from a colleague, and see the history of both without hunting for it. For a combined model: the ability to pull running notes into the periodic summary, which is precisely the feature that decides whether the combination works or becomes two systems of work. When evaluating [performance management software](/performance-management-software), test that pull with your own data instead of accepting the demonstration, because it is the join between the two models and it is where products differ most.
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