I agree with Dan & Bruno. In my free ebook, "31 Refutably Irrefutable Laws of Lame Leadership," (http://www.scribd.com/doc/273295/31-Refutably-Irr... ) I refer to an "annual review only" mindset as "#12. The Law of the Side Swipe."

"This law is also known as the 'law of the big slam' or the 'punch in the gut.' Allow your team to make mistakes and get off track throughout the year without course corrections from you along the way. Then spring a long list on them at the 'annual review." Be sure that they are caught off guard and flustered as they try to defend themselves."

A year just seems like a long time to go without communicating about performance, etc. If the communication is happening more frequently, the "annual review" becomes either a formality or not necessary.