Rethinking performance reviews: How design thinking can transform your process

The facts

Performance reviews are intended to support growth and development. However, too often they end up being a stressful and unproductive exercise, and a common source of frustration for organisations, managers, and employees alike.

• 58% of companies report that performance management reviews are not an effective use of time (Deloitte)
• 45% of managers do not see value in the review systems used (Harvard Business Review)
• 59% of employees think traditional performance reviews have no impact on their personal performance (Gartner)
• According to Gartner, only 5% of HR managers are satisfied with performance reviews (Gartner)

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Most common challenges

• Lack of flexibility: Traditional review systems can be rigid, lacking room for individual context. Not all roles or teams operate the same way, so a one-size-fits-all approach doesn’t effectively capture performance across diverse departments or roles.
• Limited manager and employee buy-in: When managers and employees feel they have no voice in the design of the review process, they’re less likely to see it as valuable. This lack of buy-in results in a process that is seen as 'HR’s requirement' rather than a genuine opportunity for growth and development.
• Misaligned timing and feedback frequency: Annual reviews are often seen as a 'once and done' event, leaving employees without timely feedback throughout the year. This cycle can feel like a box-ticking exercise instead of a genuine effort to help people improve and grow.

This lack of user-centric design leads to processes that may look good on paper but fail to meet the needs of those who participate in them. By applying design thinking, organisations can redesign their performance review systems to be more user-friendly, impactful, and aligned with real needs. 

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The root cause

Why is this such a common issue? One critical reason: performance review cycles are frequently designed by leadership in HR boardrooms without involving the people who actually use them—managers and employees. While these HR leaders are experienced and knowledgeable, they may lack insight into the day-to-day realities and challenges of the review process for managers and employees.

How design thinking can help build a performance management system that actually works. 

Design thinking is an approach that puts the user at the centre of the design process—exactly what’s missing from many performance review cycles. By incorporating empathy, collaboration, and iteration, design thinking ensures that processes are shaped by real user insights. Here’s how it can be applied to performance reviews:

• Empathy and user research: The first step in design thinking is empathy—understanding the needs and experiences of users. For performance reviews, this means actively listening to managers and employees. What are their pain points with the current system? How does an ideal review process look for them? Gathering insights from users provides a solid foundation for designing a review cycle that actually meets their needs.
• Defining the real problem: Instead of assuming the solution, design thinking encourages organisations to clearly define the problem based on user insights. For example, the issue may not be that employees resist feedback, but rather that they want ongoing feedback rather than an annual review. By clearly defining the problem, organisations can avoid jumping to conclusions and ensure their solutions are targeted and effective.
• Ideation and co-creation: Involving managers and employees in brainstorming and solution creation can lead to more innovative and practical ideas. This could take the form of workshops or focus groups where various stakeholders discuss possible ways to improve the review process. Co-creating the system helps ensure that the people who will use it feel a sense of ownership and alignment with the final result.
• Prototyping and testing: Instead of launching a new process organisation-wide, design thinking encourages rapid prototyping and testing of ideas with a smaller group. This allows for feedback and adjustments before the final rollout. For instance, a prototype might involve a mid-year check-in for a single department with a feedback loop that’s reviewed and refined based on user input.
• Iteration based on feedback: Design thinking doesn’t stop after the first attempt. By continually seeking feedback and iterating, organisations can make incremental changes that ensure the review process remains relevant and effective over time.

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How Hike One can help

At Hike One, we specialise in applying design thinking to create human-centred processes that work. Although we are not HR experts, we understand that performance reviews are an essential part of organisational growth, but they need to be designed with users—managers and employees—in mind. This is where our expertise comes in.

Here’s how we can support your organisation:

• Empathy-driven research: Our team conducts in-depth research to understand the specific challenges your managers and employees face with the current review process.
• Problem reframing: We challenge initial assumptions by reframing the problem in different ways. For instance, if the problem seems to be low engagement in performance reviews, reframing it could shift the focus to how reviews are conducted or how feedback is provided. This can open new perspectives and solutions.
• Co-creation workshops: We facilitate workshops that bring together stakeholders across your organisation to ideate and design a process that works for everyone.
• Rapid prototyping and testing: With our experience in design thinking, we help you create and test prototypes that can be refined before a full-scale implementation, ensuring that the review process is both effective and embraced by your team.
• Ongoing Support and iteration: Performance review needs can change over time, and we provide support for continuous iteration based on feedback, so your process evolves as your organisation does.

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Making performance reviews work for everyone

Annual performance reviews don’t have to be a dreaded experience. By involving the real users of the process—managers and employees—and applying design thinking principles, organisations can transform their review cycle into a supportive, growth-oriented process that genuinely helps people develop. Hike One is here to help organisations make that shift, ensuring that your performance review process aligns with the needs of your people and the goals of your organisation.

Let’s create a review system that actually works for everyone involved—because when your employees thrive, your organisation does too.

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