Employee retention and productivity are key indicators of the health of any organization. Solutions to increase these can run a business in the thousands of dollars, but there’s good news: An affordable option for companies of all sizes is to simply hold performance reviews more often.
When executed correctly, performance reviews allow employees and managers to acknowledge the wins, challenges, and growth experienced since the last review. These conversations should not only motivate team members through positive feedback and progress analysis, but also yield constructive criticism they can take action on to reach their full potential.
The business case for upping the frequency of reviews is backed by data. A study by the Center for Effective Organizations found that performance feedback culture has strong effects on organizational ﬁnancial success (in addition to other positive consequences), and has signiﬁcantly stronger effects than other performance management techniques. In other words, implementing a frequent feedback loop is a true win-win.
Despite this, many companies still limit performance reviews to once or twice a year. When the line of communication to discuss performance is only open on an annual basis, there can be an overwhelming amount of weight on this single event – hence the pre-meeting anxiety often felt by employees and managers. Plus, infrequent reviews make it diﬃcult to achieve the comfortable rapport it takes to hold constructive in-depth conversations.
Big challenges an employee faces can easily go unaddressed without a meeting dedicated to transparent discussion. When reviews take place more often – every quarter, for example – issues not only get addressed in a timely manner, but the plan of action can be shorter term. Instead of discussing a current challenge and trusting it will be resolved by the next review six or 12 months down the road, a
three-month course correction will better motivate an employee to make a change right away. By upping the frequency of performance conversations, accountability increases – as does the growth and productivity of team members.
Beyond the beneﬁt of better addressing challenges, more frequent reviews mean greater opportunities for employees to hear what they’re doing right. This is where the retention conversation comes in. According to a 2022 survey by Workhuman®, the more recently someone has been thanked by a manager and/or peer, the greater their sense of connection to the company culture and their colleagues. Being thanked also reduced instances of experiencing burnout – a top reason today’s workers are leaving their jobs.
Unlike typical one-on-one meetings that focus more on cascading messages and assigning tasks, performance reviews speciﬁcally acknowledge the growth and achievement of an employee. Let’s face it, saying “thanks” does not come naturally to every leader. It may seem unnecessary to schedule performance conversations frequently for the purpose of ensuring your people hear they are valued, but this single change can be the ticket to keeping employees satisfied, motivated, and on your payroll.
Improving performance management can look different for every organization. Some may ﬁnd a third-party platform to be a game-changer and very well worth the expense. (Shoutout to WorkDove, a great performance management system founded in Wilmington and used by companies all across the U.S.!) Others may need only for managers to begin meeting with employees every quarter, oustide of regular one-on-ones, to discuss performance. Having these conversations is a crucial piece of managing your workforce – and it proves your commitment to the overall career development and success of your employees.
For a deeper dive into what performance management means and how leaders can conduct effective reviews, sign up to receive Montani Consulting’s free Performance Management white paper.
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