Your situation might look like this: Your organization understands the value of performance reviews, but has struggled to implement them.
You try to adopt annual performance reviews to improve your company's overall performance management, but notice your young company undergoes a lot of change in just a single calendar year. The reviews you conduct might feel unsatisfactory because they may not apply anymore — because your employees have been promoted, or their positions may not exist anymore or their duties may have changed, and finally, they might be much more in number, while some no longer work at the organization.
Fortunately, Lattice is a flexible system that allows for multiple performance reviews per year. You can use Lattice for annual, semiannual, and quarterly reviews.
During any performance review, managers give performance feedback to employees -- drawing on real-time feedback and praise regarding the employee's work given throughout the year, the progress on performance goals since the last review, and general assessment of work performance. Performance reviews are also a time for managers to help employees create forward thinking goals towards performance improvement/ their overall productivity, specific projects, job descriptions, and more. These goals—whether short-term or long-term, public or private—can be assessed and updated during one-on-one meetings, which ideally occur regularly.
However, how do you know which type of performance review works best within your organization? Here are a few questions to ask yourself:
- What is an annual review?
- What is a semiannual review?
- What is a quarterly review?
- What are some factors to consider?
An annual review is performed once a year. This type is the most popular and traditional, since 70 percent of companies swear by annual performance reviews.
California-based security company Area 1 said implementing annual performance reviews turned out to be a great success, because implementing Lattice’s platform encouraged managers and employees to engage in the writing and submitting part of the review process.
As a result, employees were eager to receive information about their performance review. However, they were even more eager to begin a feedback culture of continuous, regular feedback as opposed to waiting for an annual review and the review period for feedback. The annual performance review then served as a starting point for employees to set goals to work towards in smaller amounts of time, which would be addressed in real-time feedback on a regular basis.
Annual reviews may be preferred by those who manage a lot of employees, since it can be difficult to keep up with multiple reviews per year with so many employees.
Semiannual reviews are performed twice a year, ideally once at the beginning of the new year in January and again at the beginning of July. 16 percent of companies prefer this type of performance review process.
Semiannual reviews allow for biyearly looks at an employee’s performance, sort of like a halfway check in.
One of these semiannual reviews can be tied to compensation. Rather than the employee bringing up a raise or bonus, salary increases can be embedded into one of the review cycles, complete with ratings or designations to give managers a quantitative basis to compare employee performance. That way, they can make the case for themselves as to why they deserve more compensation.
The other semiannual review can be focused on employee development. This feedback will benefit the employee, in that it will focus on how they can continuously improve their job performance through giving and receiving feedback.
Quarterly reviews are performed four times a year. Ideally, they’d follow the schedule based on each financial quarter. These are sometimes viewed as “performance snapshots” since they tend to focus on short-term goals.
Quarterly reviews may benefit younger, rapidly growing organizations looking to make improvements in short amounts of time. Rather than doing review based in 360-degree feedback every time, these reviews can serve more as check-ins, and a way to get regularly scheduled feedback rather than a comprehensive performance evaluation.
To supplement weekly reviews, Richmond-based computer software company Foster Made of about 20 to 30 employees introduced quarterly reviews to help employees get into the habit of receiving feedback. This company uses this model to help integrate feedback into their organizational culture.
What are some factors to consider?
There are a few factors to consider when choosing how often to conduct performance reviews.
Consider organizational culture. Is direct feedback natural in conversations? If yes, that takes pressure off having reviews often. If no, you may want to incorporate reviews more often into your feedback protocols.
Consider your manager-to-employee ratio. Those managing fewer employees have more time to dictate towards a review process. Although your organization may be medium-sized or large-sized, you may have managers only overseeing a handful of employees. Conversely, at a small or developing organization, you may have a single manager overlooking dozens of employees.
Consider whether a review focuses on compensation or development. You should be conducting reviews regarding compensation, so your employees have an opportunity to receive salary increases, a bonus, etc. However, these reviews should be separate from reviews based solely on employee development, or how an employee can improve their overall performance.
Consider how long an employee has been employed at your organization. In addition to annual performance reviews, Phoenix-based healthcare company Solera provides new employees with a 60-day evaluation, two months after their first day.
Consider the pace of growth. Is your organization young and/or growing fast? Is your it expecting to undergo changes, especially structurally? Has it recently taken on new investors and funding? Instead of holding off on performance reviews altogether, think about implementing them in smaller bursts.
No matter what type of performance review you choose to implement, remember that it’s okay to experiment and see how your organization responds to the reviews. You may find that after trying out quarterly reviews, an annual one is a better fit. Lattice can help you determine the right timing for your organization.