Companies Have Augmented the Annual Review With a Steady Stream of Performance Data – PerformYard’s 2027 State of HR Report

Analysis of 300,000+ employees finds review forms shrinking, check-ins multiplying, and AI adoption quadrupling in the last 12 months.

PerformYard, the AI-powered performance management and talent development platform, today released its 2027 State of HR Report.

Drawing on anonymized data from 300,000+ employees, the report documents a change: performance management is shifting from a once-a-year exercise to a steady flow of interactions. Organizations gathering the most information, most frequently, have higher review completion rates, better goal performance, and have been the first to put AI to work.

“We are seeing a really exciting change in how employee performance is managed,” said Sean Dunn, CEO of PerformYard. “Over the last few years we’ve observed a shift toward ongoing performance conversations throughout the year. More touchpoints means more opportunities to coach employees, which leads to quicker career development and tangible organizational output.”

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The review is getting smaller. Performance management is getting bigger.

Analyzing data from 2022-2026 shows that the typical performance review now has fewer questions, from 17 to 14. Rather than producing less information, the shorter review produced more: the typical written answer from an employee grew 25% longer over the period.

How often you check in matters more than how much you ask.

The report introduces a simple metric: performance touchpoints per employee, counting every review, goal, piece of feedback, and 1:1 meeting recorded for a person in a year. Organizations recording eight or more touchpoints per employee complete 94% of their reviews; those recording one touchpoint complete just 76%.

The largest single step is the second review cycle. Moving from one cycle a year to two raises the review completion rate from 84% to 90%, and organizations running three or more cycles finish each review 28% faster than those running one review.

The best programs do more reviews, more often.

The quartile of organizations with the highest goal completion rates run four review cycles a year and set 5x as many goals as the quartile with the lowest completion goal rates.

Managers are the biggest bottleneck.

In organizations where managers average 12 or more direct reports, goal completion rates are 54% lower than in organizations where they have 3-5 direct reports per manager. When asked why reviews don’t get finished, 45% of surveyed organizations said managers forget or deprioritize them, a far more common response than other issues like manual work (14%) or employee resistance (13%).

“Managers don’t slow down performance reviews on purpose. That said, managers are the natural bottleneck. They hold the pen for every direct report,” said Jesse Nichols, VP of People Operations at PerformYard. “Every leader I talk to wants to develop their teams faster, but the best organizations are doing it by making life easy for managers. They’re running frequent, small check-ins instead of solely relying on a big annual review.”

AI went from experiment to default in 12 months.

In 2025, 14.5% of organizations regularly used PerformYard AI. By September 2026, 56% were using PerformYard AI to analyze performance, including 91% of organizations with 750+ employees. The organizations that use AI tend to write longer review answers, signaling that AI is enhancing manager feedback as opposed to replacing it.

Outside the platform, the annual review is alive and well

Among 300+ surveyed organizations that do not use PerformYard, 51% run reviews on spreadsheets, PDFs, or paper; 52% give formal feedback once a year; and 87% grade their own process a C or D.

What the report recommends for 2027

• Keep reviews around 10 to 15 questions, with some open-ended questions included.
• Add a mid-year review cycle. It’s the most impactful addition you can make as an HR leader.
• Decide where AI fits. Making AI a part of the review cycle enhances managers’ output and coaching ability.

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