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

by Susan Mullin

Feedback is only as useful as it is pertinent. Improve productivity and morale by switching to a quarterly review system.

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 annual performance reviews.

You probably already know that this quest will bring nothing but negative responses across the board. After all, annual performance reviews are stressful for all involved! Managers have to spend weeks gathering information to prepare for reviews. Employees spend the same amount of time agonizing over how it will go. Furthermore, studies show traditional annual reviews are ineffective and might actually negatively impact motivation and productivity. Given both the hard research and the anecdotal evidence that annual performance reviews stress out workers, consider quarterly performance reviews instead.

Annual Performance Reviews Lack Depth

Do you remember what you did the second week of February of last year? Probably not. And neither does your manager. Doesn’t it make more sense to give compliments and constructive criticism when an action happens? Rather than allowing the memory to fade months down the line?

It does employees little good to provide them with feedback months after they exhibit a notable behavior or wrap on a project. Most managers struggle to come up with actionable feedback based on a year’s worth of performance. Without a complex note-taking system in place, managers are left to rely on sheer guesstimates. This makes the entire process inaccurate and invaluable! Increased review frequency will increase detail.

Compensation Clouds the Discussion

Another factor that negatively impacts the effectiveness of annual reviews is the compensation review portion of the meeting. Employees may 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

Similarly, 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 give managers more opportunities to address and reinforce good behaviors and practices, while also allowing workers time to reflect on and change what needs improvement.

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 aligns with existing expectations, it gives them a road map and motivation for improvement. 

Go One Step Further with Continuous Feedback

Yes, quarterly reviews are far more effective than annual reviews. That said, managers can maximize their impact even more by providing 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 regularly managers provide feedback, the quicker employees will improve.

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Posted in , Hiring Managers