My viewpoint on performance reviews has changed dramatically over the years. Previously, I was of annual reviews; structured conversations and goal setting tied to annual raises. Generationally, the Baby Boomers desired regimented feedback with an annual formal face-to-face discussion. However, social media, smart phones, 24/7 emails, remote work locations, and a very mobile workforce have antiquated annual performance reviews. They no longer meet the needs of all generations in the workforce; specifically, the Millennials.
Millennials, the largest group in the workforce today, desire ongoing and hyper-connected discussion regarding what the employee is working on and what needs to be improved. They crave feedback that is structured against their performance that outlines specific goals for immediate response. This also requires spending time with the employee to help them gain more acute insight into ongoing improvement, more efficient task-management, and achieving their set goals.
Performance review discussions become a “coaching” opportunity to lead the employee to see gaps in their performance. The frequency of these conversations help the employee be more receptive to constructive feedback and less defensive as they see you as a coach and support system to help them meet higher standards. Companies that refuse to alter their performance management approaches to meet the needs of all employees will lose the top talent Millennials in their workforce.
When it comes to designing your approach, timing is everything. With older employees, if you do reviews too often, they may feel as if they are always being watched or may not have sufficient time to implement the feedback you are providing. If you don't do reviews timely enough, you may not catch issues with employees as quickly as you should. So how often is too often? Here are some factors outside of generational specifics to consider when determining the frequency with which your business should hold performance reviews.
How Often Can You Afford to Increase Wages
The majority of companies tie performance reviews in with raises or wage increases. This is an incentive for employees to strive for better performance. Some companies do reviews and wage increases once a year, while others do them two times per year. One factor to take into account when determining timing of reviews is how often you can afford to increase wages. If you tie performance reviews into wage increases and can only increase wages once per year, you may only wish to have one performance review. On the other hand, if you can afford to raise wages twice a year, or can do minimal increases, you may wish to do performance reviews bi-annually.
How Much Time it Takes Managers to Complete Performance Reviews
Another factor to consider when determining how often your company should have performance reviews is how much time it takes managers to complete these reviews. Many companies think that they are saving money by doing reviews only one time per year, because then managers aren't filling out review forms twice a year. However, managers may have to dig as far back as 12 months prior in an employee’s files or metrics to see how their performance has shifted or improved during the course the year. This can be time consuming. While a manager may have to fill out forms two times a year if you have biannual reviews, it may be less time consuming than digging through work a year old. Always consider how much time managers take in completing these reviews to find the solution that makes the most sense for your company.
How Far Back Do You Want to Hold Employees Accountable
When deciding how often to do performance reviews, consider the lengthy of time for which you want to hold employees accountable. For example, a critical incident that occurred 10 or 11 months will be relevant in a performance review if you only hold them every 12-18 months. By that time, the employee may have already corrected the mistake, and having it resurface in a performance review can cause frustration and discouragement. Having more frequent reviews can ensure that a mistake or error that has aged out of relevance is caught and corrected sooner, and employees feel that supervisors are aware of their performance improvement.
How Long Does it Take Employees to Implement Change
The final factor you need to consider when determining the frequency with which your company should hold performance reviews is how long it takes for an employee to implement the feedback they received from their last performance review into their work. This varies greatly based on the industry of your business. In some industries, the employee can take the feedback and implement it into their work immediately. In a customer service based call center, an employee who isn't excelling may be able to make changes to increase customer satisfaction immediately. In other industries, it can take months for these changes to be implemented and then become evident. Employees may be making an effort, but the results may not yet show. In these instances, waiting a year between performance reviews may be beneficial. However, if results are shown quickly, you may want frequent reviews, to ensure employees are implementing the feedback they are given.
Many companies do performance reviews as frequently as once per quarter or as far out as once every 18 months. However, most experts recommend you conduct performance reviews every 6-12 months. The exact frequency should vary from company to company based on how often they can afford to raise wages, how long it takes managers to conduct performance reviews and how long it takes employees to implement change and that to be evident in their results. Considering all of these factors will help your company decide how often it needs to do performance reviews.
