We’re deep in the process of our quarterly performance reviews, and, I must say that I really look forward to these every quarter. There’s something rewarding about sitting down one-on-one and talking about what was accomplished, what’s coming up next, how we/they can improve, and then discussing anecdotes about how we/they followed each of our three main values (positive, self-starting, and supportive). Here are a few more thoughts that come to mind about the process:
- Things can often get so busy that setting aside 30 minutes to fill out the performance review and then 60 minutes to discuss their performance feels great just reflecting one-on-one as to the progress that’s been made
- Doing a quarterly performance review is more frequent that most companies that do an annual review, but even then we usually spend more time on things that happened in the last month because it is hard to remember what happened 60 or 70 days ago
- Looking someone in the eyes and telling them how they can improve, and then getting their feedback, is great for strengthening the relationship
I recommend simple quarterly performance reviews for all entrepreneurs.
David Cummings on Startups 
While frequent formal performance reviews are important I believe that continuous feedback about expectations and performance is the most important task a manager can do. If an employee is surprised about something on a written review then you have not been a good manager.
I agree! Continuous, open communication is critical to being a good manager.