May 20, 2026
Performance reviews in 2026: Why it’s now about manager training
Most conversations about performance management eventually get around to mentioning Jack Welch, the former CEO of General Electric, but we think – in 2026 – it’s best to get him out of the way right up front.
Welch was, by any measure, a serious business mind. During his two decades running GE, the company’s value increased by more than $300 billion, briefly becoming the world’s most valuable. And, in 1999, Fortune Magazine dubbed him “Manager of the Century”.
Welch put the annual performance review at the centre of the way he ran one of the world’s most successful companies. And, his approach – a system he called the “vitality curve” but everyone else knew as “rank and yank” – was not without internal logic.
Welch’s vitality curve divided GE’s workforce into three groups: the elite 20% of performers, the “vital 70%” in the middle and, then, the bottom 10%. This final group was classified as “non-producers”, and – at the conclusion of their performance review – they were promptly fired.
Welch believed this system created an organisation in perpetual self-improvement. It meant the weakest performers were always being replaced with stronger ones, and the bar was always being raised. And in the industrial, hierarchical, output-focused economy of the 1980s and 1990s, there was a version of the world where that argument made sense.
Now here’s what the legacy of rank and yank actually looks like in hindsight…
The current consensus is that Welch’s style of leadership did more harm than good. Enron adopted a version of the same system, and part of its catastrophic collapse was later attributed to employees inflating results to protect their jobs.
Microsoft ran stack ranking for years and watched internal collaboration collapse, with talented people actively avoiding working with other talented people to protect their relative position.
Even GE itself eventually abandoned formal forced ranking and, more recently, moved away from annual reviews entirely for its 300,000-strong workforce, replacing them with more frequent feedback.
The limits of system design
A 2012 survey found that 98% of HR managers believed yearly evaluations were not useful. In other words, that’s near-total professional consensus and the rank and yank era disappeared.
The more interesting question – and the one organisations are still struggling to answer – is what replaces it.
On this front, the last decade of performance management thinking has been dominated by process reform. Organisations have moved from annual reviews to quarterly check-ins, from numerical ratings to narrative assessments, from top-down evaluations to 360-degree feedback. All of that has value and some of it has even made a material difference.
But there’s a persistent problem that no process reform fully solves: a bad performance conversation is a bad performance conversation regardless of what framework surrounds it.
In other words, you can redesign the template, shorten the cycle, add a peer review component and integrate a new platform. But, if the manager sitting across from the employee doesn’t know how to run the conversation, none of this matters at all.
One of the key problems with rank and yank is that it assumed employees were to blame for lackluster performance. The same assumption – that performance is a property of individuals rather than a product of their environment, their support and their management – still runs quietly through most performance review systems today.
However, research increasingly points to the quality of the manager relationship as one of the most significant drivers of employee performance and retention. And that means investing in how managers have performance conversations is probably more important than the system of performance review.
Why “advice” works better than “feedback” (and what it tells us about manager capability)
Recent research at Harvard Business School found that employees respond meaningfully differently depending on whether a manager frames a performance conversation around “feedback” or “advice”.
Feedback, as most people experience it, is evaluative and backward-looking. It carries an implicit judgement: here’s my assessment of what you did.
Advice, on the other hand, is future-focused. It carries a collaborative implication: here’s what I think might help you. The content of the conversation can be identical but the psychological experience is not and neither, it turns out, are the outcomes.
When managers frame conversations around advice rather than feedback, employees tend to be less defensive, more open and more likely to act on what’s discussed. The conversation moves from verdict to problem-solving.
But knowing that distinction, and being able to consistently apply it under the pressure of a real conversation with a real employee about real performance concerns, are completely different skills. The first is simply a matter of reading an article, while the second requires deliberate practice, coaching and organisational support.
It requires, in short, manager training.
The re-skilling imperative
Moving from a Welch-era evaluation model to a genuine coaching-based performance culture isn’t a process change but a leadership transformation. And it requires treating manager capability as something that needs to be actively built from within.
MIT argues that, in practice, this approach to performance development frames it as an active, ongoing partnership: one that’s built around continuous goal-setting, regular coaching conversations and shared accountability between managers and employees.
But that model only functions if managers understand what coaching actually is, how it differs from managing-by-instruction, and how to create the kind of psychological safety that makes an employee willing to be honest about what’s getting in their way.
That’s a skill set that needs to be taught, practised and reinforced over time.
After all, MIT found, the managers who run effective performance conversations in 2026 tend to share some specific capabilities.
They prepare properly, reviewing notes from earlier conversations, identifying specific examples, thinking about what they actually want the employee to take away. They listen more than they talk. And they’re genuinely curious about the employee’s experience, not just eager to deliver their own assessment.
They can also hold a difficult conversation (about underperformance, about behaviour or about expectations not being met), without it becoming either a confrontation or an evasion. And they know how to end a conversation in a way that leaves both parties with a shared understanding of what was agreed and what happens next.
None of this is innate. In fact, very few people arrive in a management role already knowing how to do any of this well. Organisations need to treat these skills as learnable and invest accordingly in developing them.
Making it fair in a hybrid world
There’s one further dimension of manager capability that has become critical in the post-pandemic workplace: the ability to assess performance fairly across different working arrangements.
Visibility bias, or the tendency to unconsciously favour employees who are more physically present, is one of the most well-documented and least-addressed problems in the modern workplace. A manager who lacks self-awareness about this bias, or who hasn’t been given tools to counteract it, will systematically undervalue effective remote workers.
Over time, that distorts team culture, undermines trust and drives turnover among exactly the people organisations can least afford to lose.
The structural fix, as HBR’s research on hybrid workplaces found, is to redefine what performance actually means, so that managers focus on outcomes rather than activity or presence, and assess performance against clear deliverables that apply equally regardless of where someone is working.
But again, the system change only works if the manager is capable of implementing it consistently and honestly. A manager who hasn’t been trained to recognise their own proximity bias will apply outcome-based criteria selectively, often without realising it.
Building that self-awareness, and the practical skills to counteract it, is part of what effective manager training looks like in 2026.
What great performance conversations look like in practice
Across all the research and all the frameworks, a few things consistently distinguish effective performance conversations from ineffective ones.
- The performance-related conversation never comes as a surprise. By the time a formal review happens, the employee already has a clear sense of where they stand, because their manager has been having honest, regular conversations with them throughout the year. Nothing significant is being raised for the first time.
- The manager is prepared. They’ve reviewed previous discussions, identified specific observations and thought carefully about what a useful conversation looks like for this particular employee at this particular point in time. They’re not winging it.
- The conversation is genuinely two-way. The employee is asked for their perspective – on their own performance, on what support they need, on what’s getting in their way. Their answers genuinely influence the conversation rather than being received politely and then set aside.
- Performance is defined around outcomes. The discussion focuses on results, development and contribution rather than on effort, hours or visibility. This is particularly important in hybrid teams, where what someone produces is far more assessable than how they go about producing it.
- The conversation ends clearly. Next steps, a timeline and a scheduled follow-up are all agreed. Without this, even the most thoughtful review fades without impact.
All of these are learnable skills. But they don’t develop in a vacuum, and they don’t develop from a single training session.
They develop through organisations making a sustained, deliberate commitment to building manager capability, and treating that investment as seriously as they treat any other performance lever.
The bottom line
Performance reviews aren’t dead. The rank and yank era is.
The annual verdict, the bell curve, the competitive stack ranking that pitted colleagues against each other in a zero-sum fight for survival: it’s a model that’s been tried, found wanting and largely abandoned, even by the organisation that invented it.
But the organisations that have simply replaced Welch’s system with a shinier process and called it progress haven’t solved the underlying problem. They’ve just engaged in redecoration.
The organisations getting performance management right in 2026 understand that the system isn’t the only thing – or even the main thing. The manager is.
They invest accordingly in training, in coaching and in building the conversation skills that turn a performance review from an administrative obligation into one of the most powerful development tools a manager has.
That’s the real evolution of performance reviews in 2026: the capability of the person sitting across the table and the organisation’s commitment to building it.
Want more?
Want to train your leaders in how running more effective performance reviews? Talk to our team of HR experts.
Frequently Asked Questions about Performance Reviews
Are performance reviews worth it in 2026?
Yes, but only if they’re done well.
The case against performance reviews is really a case against a specific version of them: the annual verdict model, where a manager dusts off a template once a year, assigns a rating and delivers months of delayed feedback in a single meeting. That version is increasingly hard to defend. Research consistently shows it produces recency bias, surprises employees with concerns that should have been raised earlier, and generates more anxiety than genuine development.
But the alternative isn’t no performance conversations, but better ones. In hybrid workplaces with evolving roles and persistent skills shortages, clarity about expectations, progress and development matters more than ever. The organisations abandoning performance reviews altogether tend to find that the conversations don’t disappear, they just become unstructured, inconsistent and even harder to act on.
How often should I hold performance reviews with my team?
The honest answer is: more often than you probably think, and less formally than you might fear.
Most performance management experts now distinguish between two different cadences.Formal reviews or structured conversations about performance against goals, development progress and forward planning work well quarterly for most roles, or at minimum twice a year.
But formal reviews are only part of the picture. The more important cadence is the regular one-on-one (weekly or fortnightly depending on the role) where performance, workload, wellbeing and development are discussed as part of an ongoing conversation rather than a set-piece event.
What's the difference between a performance review and a coaching conversation?
A performance review is a structured, periodic assessment of how an employee is performing against agreed expectations and goals. It typically covers what’s been achieved, where gaps exist, and what the development plan looks like going forward. It has a degree of formality: often documented, sometimes linked to compensation or progression decisions.
A coaching conversation is less structured and more exploratory. Rather than assessing performance against a standard, it focuses on helping an employee think through challenges, develop their capability and find their own solutions. A good coaching conversation is characterised by questions more than statements, and by a manager who is genuinely curious about the employee’s experience rather than simply delivering their own observations.
How do you manage underperformance without reverting to rank and yank?
Directly and early, which is the opposite of what rank and yank actually required.
The fundamental problem with forced ranking systems like Welch’s vitality curve wasn’t that they addressed underperformance. It’s that they addressed it in the bluntest possible way, at the end of a long evaluation cycle, without any real investment in understanding why performance was struggling or what might fix it.
Effective underperformance management in 2026 begin by making sure the employee has a genuine understanding of what’s expected of them and how their performance is being assessed. It continues with early intervention (i.e. raising concerns through regular coaching conversations rather than saving them for a formal review). And it involves genuine curiosity about root causes: is the underperformance a capability issue, a motivation issue, a workload issue, a management issue, or something else entirely?
How do you run fair performance reviews in a hybrid team?
Start by acknowledging that fairness in a hybrid context doesn’t happen automatically. It has to be designed in, and it requires managers to actively counteract their own instincts.
Visibility bias is one of the most well-documented risks in hybrid performance management. Employees who are physically present more often tend to be unconsciously rated more favourably than equally effective remote colleagues, simply because their work is more visible and their relationships with their manager are more naturally reinforced. Most managers who exhibit this bias are not aware they’re doing it.
The structural fix is to redefine what you’re actually measuring. Performance in a hybrid team should be assessed against outcomes – deliverables, results, contribution to team goals – rather than activity, effort or presence. That requires setting clear, measurable expectations upfront that apply equally regardless of where someone is working, and then evaluating performance against those expectations consistently.
What training do managers actually need to run better performance reviews?
More than most organisations currently provide, and different in nature from what’s typically on offer.
The standard approach is to train managers on the process: here is the review template, here is the rating scale, here is the timeline, here is how to log the outcome in the system. That training is necessary but nowhere near sufficient. It equips managers to complete the administrative exercise. It doesn’t equip them to have a genuinely useful conversation.
The training that actually improves performance conversations tends to focus on a different set of skills.
These include active listening, coaching capability, delivering difficult feedback clearly and constructively and recognising and counteracting cognitive biases that distort performance judgements.
What's the difference between feedback and advice?
Feedback, as most employees experience it, is evaluative and backward-looking. It carries an implicit judgement about what someone did or didn’t do well. Even when it’s delivered with care, the word itself activates a defensive response in many people.
Advice works differently. It’s future-focused and implicitly collaborative. Rather than “here’s my judgement of your performance”, it says “here’s what I think might help you going forward”.
Harvard Business School found that employees respond more positively and constructively when managers use advice-framing in performance conversations.