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For a more detailed analysis of the pros and cons of timing options, see this: http://www.worldatwork.org/waw/community/discussions/discuss.jsp?did=2188&tid=2188&frm=sr. Some of the "cons" you mentioned, Jacque, seem to assume a very sloppy HR department or the imposition of a toxic forced distribution scheme.

For example, most enterprises with decent HR controls don't allow evaluations to go undone (or the supervisor gets a black mark on their appraisal). Doing a few reviews each month is a lot easier than doing all simultaneously and it keeps the evaluation antennae twitching all year long rather than activated only once a year, among other advantages. Increases don't always feature a fixed budget; all goals are not universally simultaneous with the focal cycle; and the forced bell-shaped curve pay distributions beloved to bean-counters create automatic dissention and assure performance mediocrity, in my opinion.

The time value of money is frequently an additional input to the decision about what timing to choose and how to transition from one to the other. Cash flow considerations also affect your practices.

One does not HAVE to do things poorly, whether it is done once a year or periodically. So the sins of one firm are not necessarily shared by all. That said, the suggestions are helpful for those with such problems.

Hi Jim --- well said. There are advantages and disadvantages of both methods. And the company culture, etc. affects the decision of which method to use.

However, most companies (in my experience) use focal point. Forced distribution is alive and well --- both for budgetary management as well as applying same "rules" for all employees. And no one likes it.

In my opinion, focal point trumps anniversary date if only because it is the one time of the year that management gets to see a formal roll-up of top performers. Some companies (Intel did as large as they were/are) had Director levels sit down and discuss why each had rated his/her people at the top. What did they do that rated them "top".

When disagreement arose on definition, they worked thru it and agreed upon a definition of "top rating". That meant that some employees were downgraded. But in the end, top management could truly know that top performers were truly calibrated across functions/BUs/divisions, etc.

I think goals could be redone quarterly. Agree they are fluid. And budget may be thrown out the window when awarding increases to "mission critical" employees.
Agree on that too --- especially with the "new normal". And top management could look at the org overall at another time of the year outside of review time.

Frankly we need to find a totally different way to handle performance/salary reviews and that is a very hot topic right now.

I know there are good orgs out there that do it right. Just wish there were more.

I wouldn't drive my car with my eyes closed for 11 out of every 12 minutes and I wouldn't want my company (when I ran one) managed by a once-a-year review of performance adequacy. PAs should be done and communicated partially quarterly, with "the" annual one (whether focal or anniversary) being a simple roll-up of the prior 3 quarters plus the most current. Thus, you don't allow people to wander off course for long and there is no "surprise party" situation(http://www.compensationcafe.com/2010/12/avoid-surprise-party-performance-reviews.html).

Comparative ratings are most important to management in terms of critical skills for retention or readiness for promotion, and both dimensions require different standards than daily performance measures. Developmental reviews are different from pay distribution decisions and should be separated in time to permit the separate different focus required. A lot of this "ranking" is garbage, IMHO, because there is no way a money-losing unit could have all top-performing people while your cash cows hold all the low-performers; but I've seen such claims made.

Agree with everything you say Jim. I really do.

IMHO the main reason we do performance appraisals (at least the one behind the scenes) is legal CYA. Lawyers want performance documented in case the company wants to terminate an employee later. And they want to see a good distribution so all managers won't rate everyone high.

Must have documentation showing justification. I know of cases where lawyers have told managers they couldn't fire someone because the last rating was a "B".

Lawyers rule the world!

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