Performance evaluations (also known as a performance review, a performance appraisal, or employee appraisal) are a part of career development and consist of regular reviews of employee performance within organizations. Clients often ask me, “what is the best time for appraisals to be given?” Typically, companies will either administer their performance appraisal process using the anniversary date (date of hire) or the focal approach; setting a review date to be used for all employees regardless of hire date. My experience has been many companies have recently moved to the focal approach; but which one is better? Here are the pros and cons to both approaches below, and you can be the judge!
Pros and Cons of Performance Reviews on Anniversary Date
- This approach gives managers an even distribution of evaluations ensuring they are not overloaded during a brief period.
- Evaluations may be of higher quality since more time can be spent on each one.
- All employees are evaluated based on a one full year of work.
- A single process runs for an entire year; making it harder to manage.
- It can be harder to make changes to forms or to the process, as it is difficult to find a time that is fair for all employees.
- It is more difficult to gather performance metrics because the data is constantly changing.
Pros and Cons on Focal Reviews (also referred to as common date or scheduled reviews)
- By doing all reviews at one time, managers have a greater opportunity to compare and contrast employees.
- Focal reviews require less administration time from HR, since the process runs over a few months rather than an entire year.
- Corporate goals can be established before you begin your process which enables employees to link individual goals to company goals.
- Managers can assess employee performance with regard to company performance.
- Newer employees (as well as those in a new role) will not have a full year of performance to be evaluated. Organizations would need to have a policy to address pro-rated reviews and managers would need to keep this in mind when conducting reviews.
- Managers with a large number of employees need to dedicate a great deal of time to the review process, and may neglect other tasks during review time.
- This review process will not be a success if there is not buy-in from senior management to ensure the evaluations are a priority during the scheduled cycle.
Whichever cycle your company chooses, it is imperative that the process be consistently administered for all employees in the company. Studies show employees excel when they know what is expected of them and these expectations are the groundwork for effective performance evaluation feedback.