Periodic review: Overview, definition, and example
What is a periodic review?
A periodic review refers to the regular and systematic evaluation or assessment of a process, policy, performance, or asset over a set period of time. These reviews are typically scheduled to occur at specific intervals, such as monthly, quarterly, or annually, and aim to identify areas of improvement, ensure compliance, and ensure that objectives or targets are being met. Periodic reviews are used across various industries, including business operations, financial management, and employee performance.
For example, a company might conduct a periodic review of its marketing strategy every quarter to evaluate its effectiveness and make necessary adjustments.
Why is periodic review important?
Periodic reviews are important because they provide a structured way for businesses to track progress, ensure that goals are being achieved, and identify potential issues before they become major problems. These reviews help organizations stay on track, adapt to changes, and improve their processes over time. By regularly reviewing operations, performance, or policies, businesses can make data-driven decisions that enhance efficiency, compliance, and overall effectiveness.
For businesses, periodic reviews ensure that the company remains aligned with its goals, complies with regulations, and continuously improves its processes.
Understanding periodic review through an example
Imagine a small business, GreenClean, that sells eco-friendly cleaning products. The company conducts a periodic review of its inventory every quarter to assess stock levels, sales performance, and customer feedback. By doing this, the company can identify products that are underperforming, adjust its marketing strategy, and make sure it’s maintaining optimal stock levels to meet customer demand.
In another example, a business may conduct an annual review of its employee performance, where managers assess each employee's contributions, set new goals, and provide feedback on areas for improvement. This helps the business improve employee performance and align individual goals with company objectives.
An example of a periodic review clause
Here’s how a clause like this might appear in a contract:
“The Parties agree to conduct a periodic review of the Agreement every six months to assess performance, compliance with terms, and any necessary adjustments to improve outcomes. Any changes required will be documented and agreed upon in writing by both Parties.”
Conclusion
A periodic review is a regular process of evaluating and assessing performance, processes, or policies to ensure they remain effective and aligned with business goals. For businesses, periodic reviews provide a structured way to track progress, identify issues, and make necessary adjustments. Regular reviews help maintain efficiency, improve compliance, and support continuous improvement across various areas of operation.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.