Why Your Employee Performance Reviews Should Be Quarterly, Instead of Annually

by Heidi Parsont

Employee meeting reviewing performance

 

Here’s a challenge for you today: Walk around the office and take an informal survey of both managers and employees.

Ask them if they like doing annual performance reviews.

You probably already know you’ll likely receive negative responses across the board. Annual performance reviews are stressful for all involved. Managers must spend weeks gathering information to prepare and employees spend the same amount of time agonizing over how their review will go. Furthermore, studies show traditional annual reviews are not effective and they actually negatively impact motivation and productivity. Given both the hard research and the anecdotal evidence that annual performance reviews are hard on a workforce, it’s time to consider quarterly performance reviews instead.

Why Annual Performance Reviews Are Ineffective

Can you remember what you did the second week of February of last year? Probably not. It does employees little good to provide them with feedback months after they exhibit a behavior or wrap a project, and most managers struggle to come up with actionable feedback based on a year’s worth of performance. Most managers rely on sheer guesstimates when scoring reviews, which makes the entire process inaccurate and invaluable.

Another factor that negatively impacts the effectiveness of annual reviews is the compensation review portion of the meeting. Employees can feel resentful if they don’t get a raise because they scored low in a vague category like “teamwork,” but they weren’t given any feedback or opportunity to grow prior to their review. Many people also find it hard to concentrate on feedback while they wait to hear if they will receive a pay increase, making the entire exercise rather pointless.

Quarterly Reviews Provide Actionable Feedback

Upping your performance review frequency benefits your employees, your managers and the organization. Quarterly reviews allow managers to address performance issues quickly, work out a plan to help the employee improve, and check in on a more regular basis to ensure that performance is, in fact, improving. Quarterly reviews also give managers more opportunities to address and reinforce good behaviors and practices.

Frequent feedback helps employees grow and improve over time, and it keeps them focused on their goals throughout the year. When team members grasp where they stand and how their performance is aligning with expectations, it gives them a road map and motivation for improvement. 

Support Quarterly Performance Reviews With Continuous Feedback

Quarterly reviews are far more effective than annual reviews, but to maximize their impact, it is important for managers to provide real-time feedback on an ongoing basis. This feedback can occur in weekly one-on-ones or informally as they identify strong or weak performance.  The more feedback managers can provide on a regular basis, the more likely employees are to build good habits and processes while working to strengthen areas identified for improvement.

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Posted in Workplace culture