Alternatives to Annual Performance Reviews: A Guide for Employers

Tracking employee performance is critical for understanding their progress and overall contribution to your business. Employee performance reviews also help identify areas of strengths and improvement, and ensure your employees are on track to meet necessary business goals.  

Traditionally, most employers would manage this process through annual performance reviews or appraisals. However, some studies have shown that annual reviews may not be the most effective way to track employee performance. Some of the disadvantages that have been noted include:  

• Too much focus on past performance 
• Not enough consistent feedback 
• Additional stress and anxiety for the employee and employer 

This has caused many employers to seek out alternative ways to measure and track employee performance, to reap greater success. The top three preferred methods include monthly one-on-one reviews, quarterly check-ins, and goal check-ins.  

One-on-one reviews 

One of the most common ways employers are finding success with employee performance reviews, is through one-on-one reviews. These typically take place on a bi-weekly or monthly basis and allow for focused discussions on goals, wins, concerns and challenges.  

Pros and cons of one-on-one reviews 

Pros 

• Team/relationship building – Regular one-on-one reviews can help to foster stronger relationships between managers and team members. This evidently leads to a greater sense of trust, and inspires open, honest communication.  
• Personalized feedback – Managers can provide tailored feedback that addresses specific concerns for individual employees. 
• Timely resolution – The frequency of these meetings allows for managers to quickly identify and address any issues before they escalate.  

Cons 

• Time-consuming – Perhaps the biggest concern is how time-consuming frequent meetings can be for both managers and employees. These meetings can take anywhere between thirty minutes to an hour and requires greater effort from the employer. which can sometimes feel unproductive. 
• Inconsistent documentation – Frequent meetings can result in managers and employees not tracking important points in as much detail. This causes inconsistent or improper documentation and may result in important points being overlooked. Using a HR software is a great way to counteract some of these issues. Peninsula’s smart HR software offers features for record keeping and cloud storage to making document keeping easier.  

Quarterly check-ins 

Typically, more formal than one-on-ones, quarterly check-ins are held every three months. These sessions offer managers the opportunity to provide structured feedback on employees’ progress over the quarter. New goals for the next quarter are set, and concerns from the previous quarter are discussed.  

Pros and cons of quarterly check-ins 

Pros 

• Goal alignment – Quarterly reviews allow for quarterly goal setting and goal alignment. Managers can carefully assess performance to ensure employees are on track to achieving their goals.  
• Lower frequency – Less time spent in review meetings could result in increased productivity for employees. 

Cons 

• Less immediate feedback – More urgent issues that need to be addressed in depth may slip through the cracks and lead to missed opportunities for improvement or commendation. 
• Added stress – Employees may feel pressured to rush and showcase achievements during the days leading up to reviews. This could result in inconsistent performances and high stress environments. 

Goal check-ins 

Goal check-ins are a way to conduct performance reviews based on the individual goals set for employees. The goals must be Specific, Measurable, Achievable, Relevant and Time-bound (SMART) to be effective.  

Pros and cons of goal check-ins 

Pros 

• Clear focus - SMART goals make it easier to track progress and success while identifying areas for improvement. 
• Adaptability – Working with specific goals allows for flexibility if goals need adjusting based on varying circumstances or changes in the overall goals of the team or company.  
• Increased motivation – Employees will have the ability to measure their progress in detail which could help motivate them to stay on track.  

Cons 

• Narrow focus – While having specific goals can be a good thing, overemphasis could lead to tunnel vision and result in other important aspects of performance being neglected.  
• Potentially stressful for employees – If employees feel the goals set are not attainable within the required time period, it could lead to stress and burnout.  

Tracking employee performance is crucial for development, growth, and overall business alignment. While each method offers its own set of challenges and benefits, it is up to employers to identify the method that works best for their employees and business model.  

Need help improving employee performance? 

Our experts can help you develop policies to track employee performance, and with any other company policies, and provide advice on any HR issues you may have. We also provide expert health and safety advice to keep you compliant and help protect you from fines. Contact us today 1 (833) 247-3652 to learn more.