The dreaded annual review isn't always the best approach for a small business. It not only takes a lot of time and paperwork but it may also miss important details. In fact, industry giants like Adobe and IBM are gradually switching to a continuous feedback model. As a small-business owner, you may want to consider doing quarterly reviews to gain more accurate insights and identify goals for the next quarter.
Quarterly reviews can provide actionable insights on business performance and uncover areas of growth and improvement. You may also conduct regular performance reviews to help your employees thrive and reach their full potential.
Why Performance Reviews Are Important
Managers conduct performance reviews to identify areas of growth, prioritize organizational goals and help employees grow professionally. This process creates value for employers and employees alike. When done correctly, it can lead to higher productivity and performance, increased customer satisfaction and business growth. Think of it as a way to plan for the future and improve your business strategy.
Several types of performance reviews exist. For example, you may evaluate your company's performance or focus on how your employees perform and help them understand what they're doing well and what could be improved. Generally, performance reviews can be classified as follows:
- Annual performance reviews
- Biannual performance reviews
- Quarterly performance reviews
- 360-degree reviews, where performance feedback is solicited from managers, reporting staff members and other employees
- Performance check-ins
Choosing one review structure over another depends on your business needs. Performance check-ins, for instance, consist of regular conversations with your employees. This approach allows you to evaluate their progress in real time and offer constructive feedback. In the long run, it can help you communicate with your team more effectively, increase employee engagement and improve your organizational culture.
Annual Reviews Are Obsolete
Conducting an annual review isn't just time consuming but ineffective too. This strategy fails in the modern business environment. Over 90% of workers believe that annual reviews don't provide accurate information, reports a study by Cornerstone. Furthermore, approximately 95% are dissatisfied with this process.
Annual reviews fail to measure the heartbeat of a company in real time. Employee and business performance may fluctuate throughout the year. As a result, you may focus too much on past problems and not enough on the current situation. Quarterly reviews allow you to provide frequent feedback, address issues quickly and adjust quicker to new market conditions.
Real-time feedback is an essential component in the modern workplace. With annual reviews, you cannot effectively address ongoing challenges and opportunities. Millennials, in particular, expect regular feedback. Conducting performance reviews more frequently allows you to offer proactive advice and build healthier relationships with your team.
The Value of Quarterly Reviews
General Electric, Adobe, Microsoft and other established companies have ditched the yearly review process in favor of continuous feedback. As a small business, you may lack the time and resources needed to conduct weekly check-ins, but you can do quarterly reviews. Frequent feedback shows that you care about your team, encourages open communication and paves the way to better work relationships. Plus, it eliminates the pressure and sense of dread associated with annual reviews.
Quarterly reviews are manageable and effective. Think of them as an opportunity to show your employees where they stand so they can continuously improve their work processes. This system also helps ensure that rewards and promotions remain objective. Your staff will feel more motivated and engaged, leading to improved overall performance.
The market is constantly changing. New technologies and trends are emerging every day, influencing consumer behavior. Holding quarterly review meetings allows you to take the pulse of the market in real time and make smarter decisions. Furthermore, you can identify and prioritize the best goals for the next period and allocate resources more effectively. Companies that use this approach report 31% higher returns than those setting yearly performance goals, according to Forbes.
Nearly 95% of employees would prefer to get feedback on their mistakes and growth opportunities in real time, and more than half want to have their performance reviewed at least once a month. Quarterly reviews will not only increase employee satisfaction but also allow you to integrate feedback into your organizational culture. Furthermore, you'll get to see how your business objectives for the upcoming quarter align with your long-term goals.
How to Structure Quarterly Reviews
There are different types of reviews used in business. A quarterly business review, for example, involves meeting customers to go over key performance indicators and set goals for the upcoming quarter. During the meeting, you can review what worked and what didn't, compare the results against previous goals and reinforce the value of your services to the customer.
Quarterly marketing reviews, on the other hand, allow you to evaluate your marketing efforts and make changes accordingly. If you wait a year to review your social media campaigns, you may end up wasting time and money on things that don't work. This is an opportunity to re-evaluate, reorganize and improve your marketing activities or maximum impact. Plus, it's a good way to identify and remove roadblocks that may prevent your business from implementing a winning marketing campaign.
Quarterly performance reviews should be a collaborative exercise rather than a pile of employee reports with ratings. They are often conducted during face-to-face meetings between managers and employees, which is why it's important to plan ahead. The performance review process typically includes the following steps:
- Set goals and determine how you will evaluate the performance of your team members
- Decide on the components of the review, such as employees' overall performance, strengths, accomplishments and areas of improvement
- Share the performance review format with your staff
- Let your employees know why the review is being conducted
- Communicate the review timeline and key objectives
- Ask your team members to complete self-performance assessment forms
- Schedule face-to-face meetings to discuss the performance review
- Request feedback from your staff
Keep These Tips in Mind
There are no set rules on how to conduct quarterly performance reviews. This process depends on your organizational culture and business objectives. For example, some companies incorporate career development plans into their reviews, which may include training, workshops and other activities designed to improve employee performance.
Start and end on a positive note to encourage open communication and make your employees feel comfortable. Listen to what they have to say and focus on the positive aspects of their performance but don't ignore the areas that need improvement. Get your team members to open up during quarterly review meetings by asking the right questions. Try to find out what they hope to achieve in the following quarter and what they need to reach those goals.
Quarterly performance reviews give employees the chance to reflect on their progress, but they have to trust that you want to help them improve. To do so, listen more than you speak, ask open-ended questions and show your support. Weigh each aspect of their performance and compliment them for positive outcomes.
Remember, performance reviews are a two-way street. Pay attention to what your team has to say, address their concerns and be clear about your expectations. With a strong feedback process in place, your employees will feel more motivated to grow and succeed in their roles.
- Cornerstone: Check-Ins: A New Philosophy for Performance Reviews
- Impraise: The Best Type of Performance Review for Your Company
- Inc.: Ditch the Annual Performance Reviews. This Is How Progressive Companies Do It
- Forbes: It's Time to Put Performance Reviews on Notice
- Reflektive: New Study Uncovers Major Gap in Employee and Employer Expectations for Performance Management and Growth
- Forbes: Eight Tips for Nailing Your Next Quarterly Business Review Presentation
- Lawrence University: Performance Review Guidelines