Should You Use Quarterly Employee Performance Reviews?

We're experiencing a major shake-up in the world of performance appraisals.

Business behemoths like GE, IBM and Adobe are completely revamping their performance review procedures, even going as far as to eliminate the annual review in favor of a continuous feedback model, consisting of weekly, monthly, or even real-time performance reviews.

But is that a little extreme? Maybe.

The answer will always depend on the unique cadence and culture of your business. So before jumping on the bandwagon with an extreme makeover of your employee review process, take a minute to consider whether the traditional quarterly or annual performance review still deserves a place in your organization.

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The pros and cons of quarterly performance reviews

The great thing about quarterly reviews is that they fit the natural rhythm of business, and are therefore fairly easy to sync up with the company's overarching business objectives.

Rather than asking the employee to keep a scorecard of everything they did over the course of a year, you give them feedback they can act on. Quarterly reviews can also make the final Q4 review easier because managers can simply pull together the previous three reviews to get the annual big picture.

On the downside, some companies only offer quarterly reviews to newer employees who need extra help getting acclimated to their roles. Though this is a great way to reduce the time and paperwork burden of the performance review process, it doesn't do much for veteran staff who may be craving feedback. Quarterly reviews work best when they're quick, easy, and used across the organization to help course-correct on the path to achieving annual milestones.

Pros:

• Employees can act on findings more quickly
• Easy to align with company's wider business objectives
• Reduce admin load of annual performance review

Cons:

• Sometimes limited to only certain types of employees
• Can become overloaded with business objectives
• Not always focused on long-term goals of company and employee

The pros and cons of annual performance reviews

The biggest beef both employees and managers have with the "dreaded annual review" is that it's based on past actions—and that's an argument that holds water. After all, wouldn't we all rather be judged on who we are TODAY, rather than the things we achieved (or failed to achieve) in the past?

But on the other hand, there's no denying the inherent momentum of starting a new year. Love it or hate it, for many, the annual review is still the best time to connect the dots between real-time feedback and big picture results.

Pros:

• It forces managers and employees to lean back and discuss the big picture
• Employees can share their biggest personal and professional goals
• Managers and employees can get clear on the exact steps to take in order to advance

Cons:

• Too much weight given to past problems and not enough to current performance
• Time and paperwork-intensive
• Frequently one-sided with employees carrying a lopsided responsibility to follow up

3 quick Q's to help you choose

1. How quickly can you act on the feedback you receive?

In other words, will your review process fuel employee engagement or add an unnecessary layer of micro-management? No matter how frequently it's conducted, any review that feels futile will lead to resentment.

If managers and business leaders are unlikely to act on the feedback received in quarterly reviews, you may be better off sticking with the traditional annual review.

2. How transparent is your company culture?

Does everyone in your office have a pretty good idea of what it means to be a strong performer? Do your managers have an open door policy for voicing concerns? If so, you may already have an unofficial continuous feedback process in place.

If not, or if you're only hearing feedback from a select few members of the team, you could probably benefit from a more frequent review process to help create an environment of transparency, open communication and engagement.

3. Is your process the problem?

For many managers, the paperwork alone is enough to keep them from doing anything more than an annual review. And it's a big reason why many HR academics are calling for an end of the annual review—or even an end to performance reviews altogether.

But do you really need a mind-numbing 8-page review form, or will 5 powerful questions do the trick? With the right questions, there's no reason you can't implement incredibly quick, effective reviews.

Annual or Quarterly Performance Reviews for Employees?

The landscape of performance appraisals is evolving rapidly, and businesses are increasingly evaluating the frequency and methodology of employee reviews. Deciding between annual or quarterly performance reviews for employees depends on various factors such as company culture, business objectives, and the specific needs of the workforce.

Pros and Cons of Quarterly Performance Reviews

Quarterly reviews align closely with the natural rhythm of business operations. By providing feedback four times a year, managers can offer timely and actionable insights that employees can implement immediately. This cadence makes it easier to sync individual performance with broader company goals.

Pros:

• Employees can act on feedback more quickly.
• Aligns easily with company's wider business objectives.
• Reduces administrative load on the end-of-year performance review.

Cons:

• Sometimes limited to newer employees needing extra guidance.
• Can become overloaded with business objectives, neglecting long-term goals.
• May not be effective for all employees, especially veterans who crave consistent feedback.

Pros and Cons of Annual Performance Reviews

Annual reviews have traditionally been the cornerstone of performance management, often coinciding with the end-of-year business review and goal setting. This format allows employees and managers to reflect on long-term achievements and set new objectives for the year ahead.

Pros:

• Facilitates a comprehensive discussion of the big picture.
• Allows employees to share their largest personal and professional goals.
• Helps managers and employees clarify the steps needed for advancement.

Cons:

• Focuses too much on past performance rather than current achievements.
• Can be time and paperwork-intensive.
• Tends to be one-sided, with unequal expectations on employees to follow up.

Choosing the Right Review Cadence: Key Questions

When considering whether to implement annual or quarterly performance reviews, ask yourself these critical questions:

1. How quickly can you act on the feedback you receive? Will quarterly reviews fuel engagement, or will they add unnecessary layers of micromanagement?
2. How transparent is your company culture? If you already have open communication channels, a continuous feedback loop may be implicitly in place. If not, quarterly reviews can foster greater transparency.
3. Is your process the problem? Sometimes, it's the complexity of the review form rather than the frequency that bogs down the process. Simplifying the review process can make it more effective, regardless of the cadence.

Ultimately, the choice between annual or quarterly performance reviews should align with your company’s culture, objectives, and the specific needs of your employees. Tools like PerformYard can help you implement and automate your chosen process, making performance management smooth and effective.