The contemporary dynamic business environment has seen a growing perception that the conventional annual performance appraisals are outdated, inflexible, and inadequate for fostering organizational growth and development. This research paper examines the practical effects of continuous performance feedback systems on the productivity of employees in modern organizations. The research study is designed using a combination of quantitative survey (N= 350) and qualitative interview approach to study the effects of continuous and constructive performance interactions on the individual work productivity of the employees. he empirical observations indicate the presence of a significant positive relationship between the frequency and quality of feedback and observed increases in the productivity of employees. In particular, companies which shifted from conducting annual performance appraisals to having a continuous feedback process on a weekly or bi-weekly basis observed an improvement of 24.8% in achieving KPIs, a decrease of 31.2% in time delays for projects, and an increase of 19.5% in job satisfaction. The data shows that continuous feedback removes the psychological ambiguity associated with unclear role perceptions, allows for establishing dynamic goal congruence by utilizing OKRs, and provides for increased intrinsic motivation through timely recognition. Moreover, the structural equation modeling shows that psychological safety and feedback literacy of managers act as important moderating factors. This paper shows that replacing episodic evaluations with continuous feedback models changes performance management from reactive, back-looking administrative tool to proactive, forward-looking strategic approach for human capital optimization. The recommendations for leadership development, continuous feedback culture creation, and digital feedback architecture implementation are given below.