How would your business benefit if you were to catch most issues early? We’re willing to bet you answered, ‘significantly.’ However, it can be difficult to keep up with your team if you aren’t having regular conversations! That’s why quarterly performance reviews are quickly becoming the new standard for growing companies. Meanwhile, the traditional approach of annual performance reviews is quickly becoming a thing of the past.
Conducting quarterly performance reviews can ensure your team is aligned and productive throughout the year… and that problems are addressed proactively so that your business will prosper.
Because quarterly performance reviews provide employees with the timely feedback that they want, companies that shift to quarterly Modern Performance Reviews will see higher retention rates. This results in a business that grows faster and more efficiently.
Here we’ll cover how a simple change can dramatically impact your business.
Why Annual Performance Reviews Aren’t Enough
- They’re Old-school: Forward-thinking companies recognize that annual reviews aren’t frequent enough.
- They Provide Limited Feedback: They don’t provide employees with enough formal touchpoints to effectively grow and develop in their roles at your company.
- They Produce A Higher ROI: Recurring conversations mean that although you’re delegating more time up front, you’ll spend less time later fixing mistakes, putting out fires, and hiring to replace people that leave.
- The Allow For More Biases: If 12 months have passed since your employee’s last check-in, recency and accuracy biases can lead to an unfair evaluation.
- They Unintentionally Incentivize The Wrong Behaviours: Employees will naturally behave differently as their performance review approaches each year (and they know they are about to be evaluated).
If you’re looking to scale with the best talent on your team, it’s important to give them what they need to be productive in their roles and help them succeed. Both individually and for the good of your company!
Many leading-edge companies (including Adobe) have done away with annual performance reviews altogether. In their place, they’ve implemented more frequent check-ins or quarterly performance reviews.
Today’s workforce expects to be supported by their leaders. They crave clear direction and frequent communication. Millennials, in particular, value feedback and 87% [of millennials surveyed] rate “professional and career growth opportunities” as being very important to them at their job.
When employees are not given this support, or provided the opportunity to discuss short-term, attainable goals and progress with management, there can be a lot of disconnects…
…which should be avoided, because confusion and disengagement are bad news for your business.
Employees who feel they aren’t getting enough direction and support, and who feel unfulfilled in their role, will search externally. Even if they opt to remain with you for a lengthy period of time, they likely won’t live up to their full potential at your company.
This means that you’ll see a decrease in productivity and morale, which will slowly tarnish your Company Culture and eventually result in an increase in turnover. Unfortunately, turnover is costly to your bottom line, and while it’s not completely unavoidable, you do want to minimize it.
How Quarterly Performance Reviews Save You Time and Help You Scale
Quarterly performance reviews are becoming the norm as modern businesses seek to provide more timely feedback to their employees… but how can conducting more reviews save you time? And, how exactly does this help your business grow?
Here are a few of the ways:
- Set short-term goals, together. You have shorter meetings where you can easily discuss progress, opportunities for improvement and growth objectives. During these meetings, you can make minor course corrections or tweak these goals where conditions have changed.
- Feedback. It’s what people want because it allows them to adjust in real-time instead of waiting months for clarity about their direction. Quarterly reviews mean that nobody strays too far off course.
- Save money. Read as: less costly mistakes, less time spent running around putting out fires and, most importantly, less turnover…
- Culture. Establishing and maintaining a transparent culture, where everyone is held accountable for their results and where communication is encouraged, is what high-performing companies do.
- Happy and productive teams. Today’s workforce values regular communication and support. They will be happier and more productive in their roles when they get it. Ultimately, people want consistent confirmation that their contributions to the team are adding value.
- Employee Retention. Your employees will stay in their roles longer if they are happy, aligned, and supported. It becomes a lot harder to scale a company if you’re constantly hiring and training to backfill for resignations.
How to Conduct a Quarterly Performance Review
When conducting your quarterly performance reviews, it’s important to prepare adequately for each employee. To do this efficiently while still getting maximum value from this process, you need a system in place.
We recommend drawing on past reviews and conversations about goals and next steps. For example, if you and your employee set a specific goal together last quarter, be sure to address it and track their progress during their next review.
Take time to discuss what is working well, and also what isn’t. Have specific examples available to explain your thoughts and allow your employees time to reflect and ask questions… or, provide feedback of their own. This process works best when the lines of communication flow openly both ways. Their input matters too! (Arguably, often it matters more than yours.)
Using a scorecard to rank an employee’s performance can help them understand where they are meeting or even exceeding expectations, and where they need to improve. This can help you set goals together and discover what kind of support they require from management.
You want to avoid using numbers to assign each person a score. This often distracts from the matter at hand, as these scores are influenced by certain biases. More often than not, the manager and employee end up negotiating points instead of having a productive conversation.
To best track employee progress, we recommend using an HRIS and other KPIs (like sales or web analytic data). A healthy balance of hard data (quantitative feedback) complemented by more observational comments (qualitative feedback) make for a well-balanced review.
Why We Love Modern (Quarterly) Performance Reviews
It’s clear that conducting quarterly performance reviews is far more beneficial than relying on one awkward, biased performance review at the end of every year. More frequent, less intense, relatively minor adjustments throughout the year are far more effective.
With quarterly reviews, you’ll get better insights into where your employees are excelling, what their 3-month goals are, and where they require your support. You will be able to keep everyone moving in the same direction and increase productivity within your business significantly.
Additionally, your team will enjoy a culture that values communication and transparency. Employees who are happy in their roles and feel that they have the opportunity to grow and develop will, for the most part, stay longer… thus increasing your retention rates!
Are you looking to conduct world-class modern, quarterly Performance Reviews at your business? Book a free consultation today and we’d be happy to discuss your current situation and where Castle HR can help.