How frequently should we do performance reviews?

In the past, companies used to do performance reviews every year. Some companies did it annually in the same month for the entire body of staff. A lot of times the performance review is tied to the salary review. And because giving feedback along the way is tough, a lot of new managers sweep all sorts of things under the rug and avoid talking about performance issues until either review season... or until the situation has escalated to the point where the employee needs to be let go.

This is not the best practice, because of a few reasons: 

  • Once a year is way too infrequent, you should be giving continuous feedback on a going basis every day, every week, every month. There are guidelines on how to balance positive versus negative feedback - your mileage may vary, the key takeaway here is

  • Tying the performance review process to the salary review processcan cause an emotionally charged conversation to get even worse. It is easy to give a good review, it is nearly impossible to have a productive conversation and take corrective action and not get pushback, because it is immediately associated with a pay raise (or lack thereof).

In fact many people have written about why performance reviews are not great.

So what is best practices? We think that feedback should be provided to employees on a going basis - but having said that, creating a more formal process to sit down with the employee every few months, e.g. on the quarter boundary, is a good way to inject a little discipline and structure into the employer-employee relationship and make sure there is time and space for both parties to reflect on a body of work, think about what is working and what is not, and jointly decide how to continue to move forward so the employee can grow and advance in their career.

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