You should probably ditch annual performance reviews

As the year winds down and companies take stock of their victories and defeats, many workplaces are gearing up for a dreaded annual tradition: The performance review.?

That’s when employees are supposed to reflect on their accomplishments and areas where they could improve. The meeting usually also provides their clearest opportunity to ask for a raise. That’s all well and good in theory, but it doesn’t always go according to plan, writes my colleague Emma Burleigh.

“No one really likes to rank themselves and write about their own successes and shortcomings. You’re doing it once a year, you’re trying to remember what you did, because this is your one chance to try and to get a bonus,” Dan Kaplan, senior CHRO client partner for Korn Ferry, a consulting firm, tells Fortune. “It’s a very clunky, cumbersome, time-consuming, uncomfortable process.”

Annual performance reviews come with some baggage. They’re wildly unpopular for starters, not just with employees but among managers as well. They can be abused by companies looking to get rid of people for any number of reasons, rather than taking actual steps to terminate a worker. They also allow more opportunities for employees to continue practicing bad work habits if managers wait until a far-away future moment to tell them what isn’t working.?

That’s why more and more companies are leaning into continuous feedback, something that has become particularly important when it comes to managing remote or hybrid teams. More frequent check-ins allow managers to build rapport with staffers, and it gives employees more opportunity to change patterns that aren’t working. It also moves more towards a player-coach model of doing business, something that’s increasingly attractive to corporate America.

“The biggest advantage is you build trust,” Susan Stehlik , professor of management communication at New York University Stern, tells Fortune. “And you start building real team bonding.” You can read more about the trouble with performance reviews here.?

Leadership Tip of the Week ??

Your company’s hardline return-to-office mandate might be setting it up for a brain drain, writes my colleague Sasha Rogelberg. That’s according to a new working paper that found companies implementing RTO lost their most senior and skilled employees.

Leadership Next

Salesforce has been at the epicenter of several tectonic shifts in tech over the 25 years of its history.

The company, and its CEO and founder Marc Benioff , rightly anticipated that rapid advancements in computing power and bandwidth would usher in a new era of work-from-anywhere technology built on cloud computing. Today, Salesforce, and its powerful suite of software tools have become among the most ubiquitous for business at large. The company’s next big bet is called Agentforce, making it easier for customers to set up agentic AI tools to increase business efficiency.

On this special bonus episode of #LeadershipNext, Diane Brady speaks to Benioff about the new era of AI agents, his leadership mentors, and how San Francisco, his hometown, has shaped Salesforce’s values.

Listen to the episode and subscribe to Leadership Next wherever you listen to podcasts, or read the full transcript here.

Those are our biggest leadership stories of the week.

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-Azure Gilman, Fortune’s Deputy Leadership Editor