When Should You Conduct Performance Reviews?
TABLE OF CONTENT
- Overview
- Why Performance Reviews Matter
- The Annual Review: A Traditional Process That Isn’t So Outdated
- The Biannual Review: Regular Feedback, Possibly Tied to Compensation
- The Quarterly Review: Less About Reviews, More About Feedback
- So, When Should You Conduct Performance Reviews?
- Get the Most Out of Performance With BrioHR
It seems like performance reviews are the kind of exercise that not one person likes. Not the appraiser (tedious and repetitive), not the HR team (too much paperwork), and certainly not the employee (all that tension and stress!).
But performance reviews are a necessary part of the employee experience. No matter how much everyone dreads them, they are a valuable opportunity for both the employee and the business.
Why Performance Reviews Matter
Part of the reason why performance reviews have stuck around for so long is that businesses recognize the value that these reviews have. They serve as a benchmark for employee performance, as well as a channel for managers to give valuable feedback to employees. It is also an opportunity to identify strengths and weaknesses in each other, while working on a development plan for the future.
In addition, by collecting enough performance review data, as a business owner you can spot trends in their workforce. For example, if employees in one department are consistently underperforming, you can look through their performance feedback to find out the cause. Data from performance reviews are also a way to tie certain aspects of employee performance with the company’s revenue.
But how often should you conduct performance reviews? This question has vexed business owners and HR practitioners since the turn of the millennium, when the traditional annual review gradually began falling out of fashion. Since then, different firms do their employee reviews on differing schedules. So, which schedule is best for your organization?
The Annual Review: A Traditional Process That Isn’t So Outdated
As its name suggests, the annual review is a mainstay of corporate HR. First pioneered by General Electric, more and more companies are moving away from the traditional model – including GE themselves.
The greatest limitation of annual reviews is that they focus too much on past performance instead of future potential. The gap of time between reviews means that recency bias creeps in. Managers will tend to focus the appraisal on only the past three months or so, ignoring the employee’s achievements and growth of the first three quarters of the year.
By the same token, negative events from the beginning of the review cycle tend to be downplayed, even if it may present an ongoing issue for the employee. Essentially, annual reviews mean that achievements are suppressed and problems are swept under the carpet.
However, annual reviews still have a place in HR practice. If you manage a large number of employees, you may prefer an annual review cycle. It can be difficult to keep track of multiple reviews per year for many employees.
But more importantly, annual reviews serve as a jumping-off point for a cycle of regular, continuous feedback. It serves as a starting point for setting objectives and key results to be worked on throughout the year. The attainment of these goals can be regularly addressed on a regular basis.
The Biannual Review: Regular Feedback, Possibly Tied to Compensation
In response to the rigidity of the annual review, some companies are instead doing performance reviews biannually, i.e. twice a year.
The biannual review cycle normally takes place once in January or February, and again at the halfway point of July or August. This allows for twice as many opportunities to provide feedback, which is much better for continuous improvement.
Furthermore, for employees whose performance reviews are tied to compensation, biannual reviews provide a more objective measure of their performance. Increases in pay can be incorporated into one of the reviews, complete with ratings or indicators, to provide managers with a quantifiable foundation for comparing employee performance.
As a result, an employee’s case for why they deserve a raise is simplified, and raises are provided on a more objective basis.
The Quarterly Review: Less About Reviews, More About Feedback
Companies are also increasingly experimenting with quarterly reviews, which of course are done four times a year.
Quarterly reviews are more about performance snapshots rather than an in-depth, all-around review. It tends to focus on short-term goals rather than an overarching review of achievements and future planning.
These shorter cycles tend to be favoured by younger employees, i.e. millennials that thrive more on consistent feedback. In the same way, quarterly reviews are also favoured by younger or startup companies that are experiencing rapid growth. When business goals are constantly shifting, having more regular reviews is a great way to realign priorities between employees and the business.
As the nature of the employer-employee relationship changes, feedback is more than ever an integral part of the relationship. Hence quarterly reviews can also be combined with weekly ‘check-ins’ or ‘pulse-checks’ to ensure an open conversation. For teams that work remotely, these check-ins are an important touchpoint for feedback and discussion, and help to engage employees that may never see each other in person.
Of course, quarterly reviews can be combined with the big annual review for a balanced performance review cycle. Having a ‘big picture’ is crucial not only for career development, but also for managers to ensure key targets are being hit.
So, When Should You Conduct Performance Reviews?
This all depends on your organization. There is no one-size-fits-all approach to performance reviews, even within different departments or for individual employees.
For example, the traditional annual review may not sit well with your company culture. For younger employees as well as managers, a lack of feedback throughout the year means that both sides simply do not know how their performance will be assessed. As a result, employees naturally become defensive instead of receptive to feedback, hindering their career development. To fix this, having a more regular review cycle (i.e. biannually or quarterly) will encourage feedback as a natural part of the conversation.
On the other hand, your organization may already have a mature position in the market. Managers and employees would know what their clearly defined roles and responsibilities are. This is more common in the manufacturing sector, where a manager may be overseeing dozens of employees. In this case, sticking to annual reviews may be the best course to take, so that productivity is not hindered by an endless cycle of filling in review reports.
But no matter the company, performance reviews are an important part of any organization. It is okay to experiment with the review cycle, as long as it is communicated to all employees and managers. In the end, it’s all part of the plan to develop careers, increase engagement, and build a stronger organization.
Get the Most Out of Performance With BrioHR
Whatever your review cycle may be, BrioHR helps you get the most out of every performance review session. You can customize annual, biannual, quarterly, or any other review schedule that suits your organization.
With custom appraisal forms and real-time monitoring of objectives and KPIs, you can say goodbye to endless manual reminders as well as tedious creation of forms and reports. This enables business owners and HR teams to truly focus on what matters most – people.
Visit briohr.com and get a free demo now.
