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In the podcasts on Performance Reviews (which were great by the way) the fact that most companies review at the end of the year was mentioned, but you stated that this was a bad idea.

Could you please elaborate on why that is?

My experience has been that when we review people throughout the year, on their anniversaries, their salary adjustments are often based more on how the company is doing at that moment than on their actual performance. Understand that this is a small company so financial fluctuations can be significant and rapid.

Many thanks,

Lance

Mark's picture

Lance-

Yes, we recommend that reviews happen throughout the year. This keeps managers from doing a poor job on EVERYONE's reviews because they are so swamped, and also from causing many large organizations to come to a grinding halt when management has to do everyone all at once. Further, the likelihood of managers getting better at reviews is virtually nil when they do everyone all at once.

This does create a potential problem with salary adjustments, but it's easily solved. At the end of the year, the company makes their salary increase determinations, and then managers simply meet those standards throughout the year, rather than everyone getting an increase all at once.

This is better for the company (costs are actually reduced) and better for the employee (better review, better quality, more detail) and better for the manager (more time, more learning, more opportunity for development).

I've recommend it many times, and clients love it.

Mark

cwcollin's picture

Mark,

I can see your idea working in an organization filled with great managers who all understand what it takes to arrive at the correct performance rating. Unfortunately many organizations, including mine, need a process to address these inconsistencies, to "calibrate" the performance reviews and salary decisions. While this may be solved by conducting the reviews during the year and making the salary decisions at one point in the year I see one other problem with your approach.

If associates are being reviewed at different times then it stands to reason that they will be developing goals at different times as well. So naturally some associates goals will be more directly tied to the organizations' than others based on the proximity of their review cycle to the organizations fiscal year/planning cycle.

Thoughts on this?

Thanks,
Charles

Mark's picture

I never make recommendations that can only be implemented by organizations filled with great managers. That would make our audience small indeed. :-)

I don't know what you mean by calibrating, but if you mean comparing folks' reviews, it's not terribly necessary. LOTS of organizations do it this way, and there are kinds of compensating factors. Managers who rate everyone high get feedback about it, either from their boss or HR. And, their TEAM... when everyone expects max raises and they are mysteriously 'un-forthcoming.'

And, I don't see the goals issue being a problem. At some point, organizational initiatives that play a large role in managers' evaluations overlap annual cycles.

Essentially, every choice regarding organizational structure and the connective tissue of management policies and procedures are a choice driven by core viewpoints, of which there are only a couple... and all such choices have an associated set of positives and negatives.

So, yes, "my" way has problems, just like the others' do. I believe mine leads to better results from what most people and the organization want from their reviews: clear feedback and future guidance.

It's a privilege!

Mark

PS: And, I addressed your concern in the abstract. It does NOT necessarily follow that goal setting happens at review time. It can happen at a different time.