Why Career Conversations Matter More Than Annual Appraisals

Why Career Conversations Matter More Than Annual Appraisals

Modern People Leadership for Growing SMEs
By Lavender and Sage HR & Recruitment

For years, annual appraisals have been the default tool for performance management. But for many SMEs, especially those without a formal HR structure, they are not just outdated, they are ineffective. What truly moves people forward is not a yearly meeting ticked off a list. It is the rhythm of meaningful, regular conversations.

The Flaw in Annual Appraisals

Relying on a once-a-year review is like trying to steer a ship with a once-a-year compass check. If you are already holding regular 1:1s, that is where development should live - in real time. These are the moments to coach, guide and encourage your people to think critically. To ask them what they want in the short and long term, and to support them, not by doing it for them, but by giving them the space to figure it out.

As leaders, your role is not to provide all the answers, but to ask the right questions.

What Career Conversations Really Do

When businesses embrace a culture of ongoing feedback, something powerful happens. Teams become more focused, supportive and self-driven not because they are being managed more, but because they are being led.

At Lavender and Sage, we have seen it first-hand: when you give direction every quarter, then break this into meaningful 1:1s tailored to each person’s growth, your people step up. They become champions for each other. They stop waiting for permission and start thinking bigger.

Managers Do Not Need to Be Experts - Just Curious

Many SME leaders hesitate because they think career development conversations are complex or reserved for HR. They are not. The most powerful thing a manager can do? Be open, consistent and ask questions like:

🟣 “What is feeling energising in your work right now?”
🟣 “What do you want to try next?”
🟣 “What support do you need from me?”

And here is the secret: Ask one development question at the end of every 1:1. Simple. Consistent. Impactful.

Career Conversation Starter Kit

No HR? No Problem. Make It a Leadership Habit

You do not need a full HR department to build a feedback culture. You need intention. Create space where conversations happen regularly, not just for the “rising stars” but for everyone. The aim is not to fix your team, but to create an environment where they can think differently and grow.

Set the expectation that development is ongoing. Keep notes. Follow up. Celebrate progress, not just performance.

Annual Reviews Are a Snapshot.

Career Conversations Are a Journey

The best leaders do not wait for reviews; they lead through conversation. If you want a team that is engaged, evolving and aligned with your business vision, start now. Make development part of the everyday, not the calendar year.

If you would like a conversation about how to embed this into your business, we are here to help, with simple tools, manager guidance, and practical HR strategy that fits the pace of SME life.