The majority of performance reviews happen once a year. That's 12 months worth of information you need to retain about a single employee. Now what happens if you have multiple people, maybe even 10 or 20, reporting directly to you? There's a good chance you won't remember every detail about their performance. So imagine how this affects employee happiness and morale.
Turns out employees are happier when their companies eliminate annual performance reviews. If you think about it, employees wouldn't have to wait a full year to find out how well or terribly they're doing — and let's face it, some employees don't even stick around for that long.
And to further emphasize the point, nearly 10% of Fortune 500 companies have ditched annual ratings. One of them is GE, and they're currently experimenting with replacing the annual format with more frequent, app-based conversations. Having frequent conversations means employees get feedback and improve in real time. Development would happen throughout the year. If you want your employees to stick around for longer, give them the opportunity to grow rather than make them wait.