The performance review has traditionally been an important tool for analyzing organizational performance–but they’re often no good. It’s no secret that annual reviews are dead, but ditching reviews altogether isn’t the best alternative either. Instead, we recommend HR leaders increase the number of review cycles.
Getting into a frequent rhythm of performance reviews doesn’t just provide HR leaders with more useful data points throughout the year, it can also lead to heightened trust and transparency among employees. When one-off performance reviews turn into routine conversations, employees are more likely to share honestly and openly rather than wondering if their answers will be used against them. For managers, frequent reviews mean more opportunities to ensure employees are successful and progressing towards their desired career path.
And frequent performance reviews don’t just feel good. Companies that have quarterly reviews of performance and goals can generate 31% greater returns. If you’re ready to update to your performance strategy, check out the three tips below for facilitating a culture of more frequent review cycles.
This HBR study found that while 58% of employees would trust a complete stranger, just 42% would trust their own boss. This fractured relationship can have an overall negative impact on performance and lead to an ineffective review process. Employees who are reluctant to open up and share about their careers leave managers without real or useful insights.
Instead of letting managers wing it, HR leaders should provide them with a structure for having these conversations, including strategic questions, conversation prompts, reviews from other close colleagues, and a way to easily relay this information to HR.
Managers should also schedule frequent check-ins and 1-on-1 meetings. While more informal than a quarterly or biannual review, these practices are helpful in helping managers strengthen relationships and monitor employees’ day-to-day performance in between reviews. They also protect against recency bias, so when formal cycles occur, managers don’t simply default to analyzing what they’ve seen in the days leading up to a review.
The benefits of regular communication among managers and employees go beyond performance reviews: nearly 25% of workers would consider quitting due to inadequate, infrequent performance reviews.
Asking the right questions and leading productive discussions are critical, but at some point, managers need a tangible way to quantify performance and generate data about their team’s capabilities. Having the right tools for these adds structure and credibility to the review process.
A holistic people and performance platform can help HR leaders gain accurate insights into employee performance and discover trends and analytics that highlight where the organization is the strongest, and what areas or teams need more attention.
Having the right performance metrics tools isn’t just important for leaders, managers and employees are impacted too. One study found that only 26% of workers believe reviews to be useful. To dive deeper into their frustration, the two terms most commonly associated with reviews are “time-consuming” and “pointless.” Plus, 90% of managers are dissatisfied with how their company conducts reviews. All in all, failing to know your workforce’s potential leaves revenue on the table.
The truth is, reviews aren’t just a way to quantify employee performance. They can also help HR leaders and managers understand if employees are fulfilled in their roles and achieving their personal goals. Monitoring goals is critical to engagement: 32% of employees want to see and understand the progress they’re making towards achieving them.
Performance reviews are an opportunity for managers to understand where their employees want to be and find the right opportunities to get them there. Employees will be the most productive when they know their manager is there to help whenever and however they need it.
By tracking performance and making adjustments throughout the year, you’ll discover who your strongest performers are and help build a talent pool of future leaders.
Performance management has evolved to be a continuous loop, not an endgame. Conducting multiple review cycles throughout the year will help managers gain deeper insights into their team. And the results certainly justify the change.
Baili Bigham is the Content Manager at 15Five, continuous performance management software that includes weekly check-ins, OKR tracking, peer recognition, 1-on-1s, and 360° reviews. When Baili isn’t writing, you can find her binge-reading a new book or strategizing ways to pet every dog in San Francisco.