For those who have a performance rating for recent new hires, how long is your probationary period? I.e., what are the parameters used to exclude recent hires from the annual performance review process or give them a default rating of 'too new to rate'?
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If an employee is with us less than 6 months of a year, they will receive a “too new to rate”.
If people join after October 1st they are excluded from the formal performance rating process as the period is simply too short to achieve stretched goals and to be evaluated against the goals. They are included in the short term incentive bonus and receive a default rating to achieve 3/12 of their bonus and they are included in the annual salary review process to make sure we keep them on the right comp ratio per benchmarking.
Employees who have been with the company for less than three months are excluded from our formal performance management process. This exclusion applies to linked processes such as merit increases and bonus allocation.
Employees with less than one year of tenure receive a performance rating based on their demonstrated performance. Additionally, they remain eligible for prorated increases and bonuses. For managers assessing employees with less than six months of tenure, we recommend a ‘neutral’ rating unless there are exceptional circumstances of either concerning performance issues or outstanding excellence.
In some countries, employees undergo formal probationary periods (e.g., six months) shorter than the period considered during the performance management rating (e.g., four months). To ensure consistency, we aim to avoid significant discrepancies between the formal performance rating and the final probationary assessment. Typically, recent hires are rated as meeting expectations at both intervals. However, if an employee’s performance significantly declines between the performance rating and the end of probation, managers must be prepared to justify the lower rating with documented evidence. In consultation with HR/Legal, managers may choose to extend the probation period or terminate employment if necessary.
Our Performance Program is a pay for performance program. For a new hire to be eligible they must have started regular full-time employment by October 1st and have worked 90 days within the calendar year.
New employees that meet these requirements create goals and participate in the performance program, but as per our current guidelines, their overall performance rating would be "Approaching Expectations/Developing into Role". From a compensation perspective (short term incentive), their bonus would be pro-rated based on time in role, and the rating of "Approaching Expectations/Developing in Role" is the same budget as our "Meets Expectations" rating.