Rob Wheatley

What’s best: Lock-step or anniversary based employee performance reviews

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We are often asked whether PerformanceHub supports anniversary based performance reviews. The short answer no. PerformanceHub only supports ‘lock-step’ reviews (sometimes referred to as “focal performance reviews”).

If you are thinking about this for your organisation, here is some of our thinking as to why we went down the ‘lock-step’ route. Maybe it will help you decide. 

 

Arguments in favour of lock-step reviews :

  1. Gives you a view across all your employees at the same time. If you have anniversary-based reviews, then some people may have a recent review, with others being as much as 11 months out of date, making performance comparisons unfair.
  2. Makes it easier to change your process, as you’ll have clear water during the year when no-one is doing reviews. So you can make the change and train / inform people as needed.
  3. Better completion rate: everyone else is going through the same process at the same time, so people are more focussed on getting it done. HR and managers know exactly where everyone should be in the process and can chase accordingly.
  4. Encourages the manager to consider the performance of individuals in the context of team and organisation performance. Managers can benchmark across their team, and with other managers, and HR can benchmark / calibrate across the whole company.
  5. If pay reviews are also anniversary-based, then some people may get unfair pay changes compared to their colleagues, particularly if part of bonuses and/or raises are tied to company performance. Eg a company goes through a lean period, then lands a big customer and is feeling more flush. Depending on when your review was, you may have got a small or large bump. It may be that reviews held later in the financial year are more likely to get a good raise/bonus, if the company is feeling confident of meeting the budget.
  6. Easier to keep people aligned to company objectives, and to know how much work is going on that’s not aligned to current company objectives. Also easier to build momentum for the start and end of the review periods, eg with all-hands meetings.
  7. Because people are out of step, it can make succession planning harder.
  8. Overall it’s less effort for HR and managers.
  9. You can do lightweight refresher training, but doesn’t make sense to do when it’s spread throughout the year

 

Arguments in favour of anniversary reviews:

  1. You can guarantee performance data for the first performance review of new starters.
  2. It spreads the load of doing performance reviews through the year; with lock-step reviews there’s one time every year when managers have to spend a lot of time doing reviews.
  3. If performance is measured against some standard or fixed criteria, then the benchmarking benefit of lock-step may not be so important.

 

So, there are some good arguments to go with anniversary based reviews, but not so many as the ‘lock-step’ method. Also, the arguments aren’t particularly strong, particularly if you have probation reviews or regular one-to-one meetings (both supported by PerformanceHub). When using these features, employees starting shortly before your organisation’s ‘appraisal time’ won’t cause any problems.

We’re not too convinced about the ‘spreading the load’ argument either. Sure, it might be less disruptive to not have to review your whole team at once, particularly if your review period ends at a busy time for you (end of year accounts for instance), but we feel that the amount of effort is increased if you have a constant trickle of reviews going on over the year rather than planning to do them all at the same time.

Effort can always be reduced by having regular one-to-ones, and by reviewing objectives as they’re completed. Also, by keeping the appraisal form as short as you can. Our tip here – for every section you want to add to an appraisal, consider asking yourself:

  1. Will filling in this section help either the manager or employee improve the employee’s performance (either by helping them form concrete plans or by getting them to think about something they wouldn’t normally)?
  2. Will filling in this section help the organisation improve performance (e.g. by analysing the data centrally and then acting on what you find)?
  3. Do we have a process and resources to analyse the data, i.e. will we do anything with the information once it’s collected?