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Performance reviews are supposed to help employees grow, but in reality, they often do the opposite. Outdated, rigid, and filled with bias, traditional reviews leave employees frustrated and managers overwhelmed. Companies have tried scrapping them altogether—only to realize they still need a way to measure performance. So, if the old system doesn’t work, what’s the solution?
In this episode of Future Ready Leadership, I sat down with Doug Dennerline, CEO of Betterworks, to unpack why annual performance reviews fail, how AI is reshaping leadership, and what the future of work means for managers and employees.
Listen to the episode here on Apple Podcast & leave a review!
The Problem With Performance Reviews
One of the biggest flaws in traditional performance management is that it relies on a once-a-year review process that doesn’t accurately reflect an employee’s contributions over time. Doug explained that many organizations suffer from Recency Bias, where managers only evaluate employees based on their most recent work instead of looking at their overall performance.
In response, some companies have tried to eliminate performance reviews altogether, but they quickly discovered that employees still wanted clarity on where they stand, how they can improve, and how performance impacts their compensation.
As a solution, Doug sheds light on Continuous Performance Management where goals aren’t set once a year and forgotten but revisited regularly through quarterly check-ins and real-time feedback loops. It’s not about eliminating reviews but rethinking how they’re done.
How AI Is Transforming Leadership and Performance Reviews
Doug didn’t just talk about what’s broken—he shared how AI is helping fix it. Aside from its mission for automation, AI has been augmenting leadership and helping managers make better, more objective decisions. Here’s how AI is changing the game:
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AI-Powered Coaching: Managers don’t always know when to step in. AI can send nudges—reminders to check in with employees, acknowledge progress, or give feedback before it’s too late.
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Bias Reduction Algorithms: Performance reviews have always been subjective. AI helps flag inconsistencies and reduce bias, ensuring promotions and evaluations are based on real performance—not office politics.
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AI-Generated Insights: Leaders now have real-time data on employee engagement, productivity, and development—helping them make smarter, faster decisions.
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AI-Driven Succession Planning: Instead of guessing who’s ready for leadership roles, AI identifies high-potential employees and helps organizations develop their future leaders.
Doug was clear: AI won’t replace managers, it will make them better. It’s like a second brain, helping leaders track progress, remove bias, and make better decisions faster.
Listen to the episode here on Apple Podcast & leave a review!
What Leaders Need to Do Differently
The shift from outdated reviews to AI-driven performance management advances leadership. But to make it even more effective, here are the biggest changes Doug says leaders need to make:
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Move from annual reviews to ongoing conversations. Employees need real-time feedback, not a once-a-year meeting. Regular check-ins make performance discussions more natural and useful.
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Embrace AI as a leadership tool. AI can help managers coach their teams, provide real-time insights, and eliminate bias but leaders have to actually use it.
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Reimagine hybrid work with intentionality. Companies forcing employees back to the office full-time are pushing top talent away. The future isn’t about where people work—it’s about how they work.
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Make compensation and career growth more dynamic. Why should employees wait a full year for a raise? Real-time performance should lead to real-time rewards.
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HR must evolve from compliance to strategy. The best CHROs aren’t just managing policies—they’re driving business growth, workforce planning, and leadership development.
The Future of Work Requires Smarter Leadership
As workplace dynamics continue to evolve, leaders who stick to outdated management techniques will fall behind. Sticking to what worked 10 years ago will only sabotage your leadership. The future is here and AI, real-time feedback, and data-driven decision-making are written all over its success manual.
If you want to learn how to fix performance reviews, use AI to your leadership advantage, and lead in a way that actually engages employees, listen to my full conversation with Doug Dennerline. You’ll walk away with actionable strategies to future-proof your leadership and create a workplace where employees thrive.
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This episode is sponsored by Betterworks:
If you’re ready to move from managing performance to shaping the future, EmpowerHR 2025 is where it begins. This exclusive event, hosted by Betterworks, is bringing together top HR innovators to share breakthrough strategies in performance management on March 20th. Save your spot at empowerhr.betterworks.com.
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Listen to the episode here on Apple Podcast & leave a review!
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