Performance Review Cost Calculator

Understanding Performance Review Costs

Performance Reviews are employee performance evaluation. While these meetings serve important purposes, their costs often go untracked and unoptimized. A typical 60-minute performance review with 8 team members costs approximately $605 per session when accounting for full compensation and overhead.

What's Included in the Cost?

• Direct Salary Cost: Hourly compensation x duration x attendees
• Overhead Multiplier (1.4x): Benefits, payroll taxes, equipment, office space
• Context Switching: 15 minutes of productivity loss per meeting for preparation and recovery
• Opportunity Cost: Alternative productive work that could be completed instead

Performance Review Cost Benchmark (8 People, 60 Minutes)

With a $75,000 average salary baseline, a standard 60-minute performance review costs about $404 per meeting including overhead. If this meeting runs weekly, annual cost is roughly $21,008.

Optimization Strategies

Most performance reviews can be optimized without sacrificing effectiveness:

• Reduce attendees: Only invite required decision-makers. Each person removed saves $3931 annually for weekly meetings.
• Shorten duration: Cut to 25 or 45 minutes instead of 30 or 60. Studies show work expands to fill time.
• Async alternatives: Move information-sharing to written formats, preserving meetings for collaboration.
• Preparation requirements: Require pre-reads and agendas. This reduces meeting time by 20-30% on average.

When to Consider Canceling

Not all performance reviews need to happen. Consider canceling or replacing with async if:

• The meeting is primarily information-sharing (no decisions required)
• Attendance is consistently low or optional attendees don't show up
• No action items result from most meetings
• The same updates could be shared via email, Slack, or a recorded video