How often should companies do performance reviews? For most Australian small businesses, the right answer is a short check-in every quarter and one formal review each year. New starters need extra reviews before their minimum employment period ends. That rhythm keeps feedback fresh and builds the paper trail you’ll need if things ever go wrong.
Let’s be honest. Reviews are the part of managing people that most founders put off until something breaks. Then the first real conversation about performance happens on the same day as the first warning letter. That’s the worst possible order to do things in.
- Quarterly check-ins plus one annual review suits most small businesses. Check-ins take 15 to 30 minutes. The annual review carries the bigger goal-setting and pay decisions.
- Performance reviews aren’t legally required in Australia. No law sets a frequency, but your contract, policy or enterprise agreement may commit you to one.
- Review new starters before month 6, or month 12 in a small business. That’s when the minimum employment period ends and unfair dismissal protection kicks in.
- Frequency matters because of the paper trail. If you dismiss someone for performance, the Fair Work Commission asks whether they were warned first.
- Underperformance doesn’t wait for the calendar. Raise a problem when it happens, then use the next scheduled review to track progress.
How often should companies do performance reviews?
At least twice a year formally, and ideally with a quick check-in every quarter. One review a year is the most traditional approach. It’s also the weakest.
Why? Twelve months is a long time to carry a problem. Managers remember the last six weeks and forget the rest. An issue that started in February has either been forgotten by December or grown into something much harder to fix.
| Frequency | Best for | The catch |
|---|---|---|
| Annual only | A formal yearly record and the pay conversation | Too slow. Problems sit for months before anyone names them. |
| Twice yearly | A workable minimum for teams under 10 | Still slow if something goes wrong in month one. |
| Quarterly check-ins plus an annual review | Most Australian small businesses | You have to actually run the check-ins. Book them now. |
| Monthly one-on-ones | Fast-moving teams and new managers | They slide into status updates unless you protect time for feedback. |
Our view? Quarterly check-ins plus one annual review is the sweet spot. The check-ins stay short and informal. The annual review is where you set goals for the year ahead.
One tip that saves pain later: keep the pay conversation separate. Hold it a few weeks after the development review. The moment money is on the table, people stop admitting what they’re struggling with, and you lose the most useful part of the conversation.
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Are performance reviews mandatory in Australia?
No. No Australian law requires you to run performance reviews, and none sets a frequency. The Fair Work Act 2009 (Cth) doesn’t require annual reviews either.
Not mandatory isn’t the same as optional in practice, though. Reviews become an obligation when:
- your employment contract or offer letter promises them
- your own performance management policy sets a schedule
- an enterprise agreement ties pay progression to an assessment
Here’s the trap. A founder downloads a policy that promises quarterly reviews, then never runs one. If a dispute ever lands, the first thing anyone checks is whether you followed your own process. A policy you ignore is worse than having no policy at all.
And the obligation runs both ways. Asking an employee to attend a review is a lawful and reasonable direction, so they can’t simply refuse to turn up.
How often should you review new employees?
More often than everyone else, and against a deadline most founders don’t know exists.
An employee can’t make an unfair dismissal claim until they’ve finished the minimum employment period. That’s 6 months, or 12 months if your business has fewer than 15 employees. The headcount includes regular casuals.
Most founders assume probation is their legal safety net. It isn’t. A 3-month probation clause in your contract doesn’t shorten the minimum employment period, and a 6-month one doesn’t extend it. The statute sets the deadline, not your contract.
So your new-starter reviews need to land well before that date:
| Business size | Minimum employment period | Suggested review points |
|---|---|---|
| Fewer than 15 employees | 12 months | Month 1 check-in, month 3 review, month 6 review, month 10 decision review |
| 15 or more employees | 6 months | Month 1 check-in, month 3 review, month 5 decision review |
The decision review is where you make the call. Confirm the person is right for the role, or deal with the gap. Leave it to the final week and you’ve run out of time to do either properly.
One caution. General protections apply from day one, whatever the minimum employment period says. A new starter who has just made a complaint or taken leave isn’t someone you can quietly let go because they’re “still on probation”.
How often to do performance reviews as your business grows
When should a startup start doing performance reviews? The day you hire your first employee. You don’t need a formal HR system yet. You need the habit, and it’s far easier to build with one person than with twelve.
| Team size | Review rhythm | What to watch |
|---|---|---|
| 1 to 5 employees | Monthly one-on-ones with the founder, a written review every six months | Keep it light, but write it down. Memory isn’t a record. |
| 5 to 14 employees | Quarterly check-ins, an annual review, a simple written policy | You’re a small business under the Fair Work Act, so following the Small Business Fair Dismissal Code is your protection. |
| 15+ employees | Quarterly check-ins run by team leads, an annual review compared across managers | New hires get unfair dismissal rights after 6 months, and a “4 out of 5” needs to mean the same thing in every team. |
The jump to 15 employees catches growing companies out. Overnight, new hires can claim unfair dismissal after 6 months instead of 12, and the Small Business Fair Dismissal Code stops applying. If your review calendar was built for a team of eight, rebuild it before you cross that line.
Which employees need a different review schedule?
One cadence won’t fit everyone. These groups need a tweak.
Regular casuals
Casuals on a steady roster are the group most businesses skip. That’s a mistake. A casual who has worked regular, systematic shifts for long enough can bring an unfair dismissal claim like any permanent employee. Give them the same quarterly check-in.
Part-time and remote staff
Same cadence, adjusted goals. Pro-rata the targets, not the attention. For remote employees, review what they deliver rather than how visible they are. Managers who equate presence with contribution quietly penalise their remote team.
Managers
Your managers need reviews too. Add one question to theirs: are you running your own team’s check-ins? If the answer is “sort of”, you’ve found your problem.
Anyone who’s underperforming
Take them off the regular calendar. Don’t save a problem for the next scheduled review. Raise it within days, agree in writing what needs to change, and set a follow-up 4 to 6 weeks out. A performance management plan gives that conversation a clear structure.
Why review frequency matters if you ever need to let someone go
This is where reviews stop being a nice-to-have. When someone brings an unfair dismissal claim, the Commission considers whether you had a valid reason, whether you told the employee and let them respond, and, for performance dismissals, whether you warned them beforehand.
Regular reviews are how you prove that warning happened. A glowing annual review followed by a dismissal three months later tells a very different story from four documented check-ins that each flagged the same gap.
Quick myth-bust: there’s no rule requiring three warnings. What matters is a fair process. A written history of timely feedback is the backbone of one.
Frequent reviews protect you on the bullying front too. Under the Fair Work Act, reasonable management action carried out in a reasonable way isn’t workplace bullying. Calm, regular, documented reviews look exactly like that. A surprise ambush after a year of silence doesn’t.
The Fair Work Ombudsman’s free guide to managing underperformance is a sensible baseline. For record-keeping, PIPs and the dismissal process in more depth, see our legal guide to performance reviews in the workplace.
What we see in Lawpath consultations
Our lawyers see the fallout from skipped reviews regularly. It tends to arrive at the worst possible moment. These patterns come up again and again.
The first written record is the warning letter. A common request is for a final warning and a performance improvement plan, needed this week. When we ask for earlier review notes, there aren’t any. The business has been unhappy for months but never said so in writing. A formal warning letter lands far better when it follows documented feedback than when it comes out of nowhere.
Missing process becomes the employee’s argument. When employees respond to termination allegations, a recurring theme is that the business had no processes or support in place. An empty review file hands them that point for free.
Long-serving casuals were never reviewed. We regularly see casuals who’ve worked a regular roster for years with no formal feedback at all. When the relationship sours, the employer assumes a casual can simply be dropped. That assumption can be expensive.
Role changes without a paper trail. Small businesses restructuring or shrinking a role have little record of what the role involves or how the person has performed. That makes it harder to show the change is about the business rather than the person.
The clock runs fast at the end. A dismissed employee has just 21 days to apply to the Commission. Once employment has ended, you can’t go back and create the review history you didn’t keep.
The fix in every one of these cases is the same. A short, regular, written check-in.
What should a quarterly check-in cover?
A check-in isn’t a mini annual review. Aim for 15 to 30 minutes and work through these questions:
- What have you delivered since we last spoke?
- What’s getting in your way?
- What do you need from me?
- Is anything about to go wrong that I should know about?
- Has your role changed? If so, check that the position description and award classification still match what you’re doing.
- What are we each agreeing to do before next time?
Then write down four lines: the date, what you discussed, what you agreed, and the next check-in date. Email it to the employee. Done.
That short email is worth more in a dispute than a beautifully designed form you fill in once a year. For the annual review, a structured performance review template keeps every manager covering the same ground.
How to set up a review calendar you’ll actually stick to
- Pick your cadence. Quarterly check-ins and one annual review, unless you have a real reason to do something different.
- Write it down. Put the schedule in a policy and make sure your employment agreements reference it, so everyone knows what to expect.
- Book every date for the year today. Recurring calendar invites beat good intentions.
- Add new-starter reviews to onboarding. Work back from the end of the minimum employment period.
- Keep one folder per employee. Review notes contain personal information, so store them securely and limit who can see them.
- Rebuild the calendar at 15 employees. The legal settings change, so your schedule should too.
Frequently asked questions
How often should companies do performance reviews?
For most Australian small businesses, a 15 to 30 minute check-in every quarter plus one formal annual review. Review new starters more often, and make sure they have a review before their minimum employment period ends: 6 months, or 12 months in a business with fewer than 15 employees.
Are performance reviews mandatory in Australia?
No. No Australian law requires performance reviews or sets how often they happen. They become an obligation if your employment contract, performance management policy or enterprise agreement promises them. If your policy sets a schedule, follow it.
Are annual reviews still enough?
Not on their own. A year is too long for someone to underperform without hearing about it, and recency bias means managers mostly assess the last few weeks. Keep the annual review for goals and pay, and add short quarterly check-ins in between.
How often should new employees be reviewed?
Check in at month 1, run a proper review at month 3, and hold a decision review before the minimum employment period ends. That’s by month 5 in a larger business, or month 10 in a business with fewer than 15 employees. Probation clauses don’t change these timeframes.
When should a startup start doing performance reviews?
From the first hire. Monthly one-on-ones and a short written review every six months are plenty for a team under five. The goal is building the habit and a written record early, before the team grows and the stakes get higher.
Can an employee refuse a performance review?
Not reasonably. Directing an employee to attend a review is a lawful and reasonable instruction. They can disagree with what’s said, add their own comments to the record, or decline to sign, but they’re expected to take part.
How long should a performance review be?
A quarterly check-in needs 15 to 30 minutes. A formal annual review runs 45 to 60 minutes, plus an hour or so of preparation. If annual reviews regularly take longer, too much is being saved up for them.
Should pay reviews happen at the same time?
Keep them a few weeks apart. When pay is on the table, employees defend their salary instead of talking honestly about what’s hard. Run the development conversation first, then the pay conversation.
If this article made you realise you haven’t run a single review yet, you’re not behind. Plenty of the small businesses we speak to are in exactly the same spot. You don’t need software or an HR team. You need a schedule, a short template and the first date in your calendar. If a performance issue has already escalated, talk to an employment lawyer before your next step.
Ready to lock it in? Set your review schedule with a Performance Management Policy today, and your team will always know what’s coming next.
